Lifetime Income Disclosure Act

I 116TH CONGRESS 1ST SESSION H. R. 2367 To amend the Employee Retirement Income Security Act of 1974 to require a lifetime income disclosure. IN THE HOUSE OF REPRESENTATIVES APRIL 25, 2019 Mr. POCAN (for himself, Mr. BUDD, and Mr. SUOZZI) introduced the following bill; which was referred to the Committee on Education and Labor A BILL To amend the Employee Retirement Income Security Act of 1974 to require a lifetime income disclosure. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Lifetime Income Dis- 4 closure Act’’. 5 SEC. 2. DISCLOSURE REGARDING LIFETIME INCOME. 6 (a) IN GENERAL.—Subparagraph (B) of section 7 105(a)(2) of the Employee Retirement Income Security 8 Act of 1974 (29 U.S.C. 1025(a)(2)) is amended— 9 (1) in clause (i), by striking ‘‘and’’ at the end; 10 VerDate Sep 11 2014 23:32 Apr 25, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H2367.IH H2367 kjohnson on DSK79L0C42 with BILLS 2 •HR 2367 IH (2) in clause (ii), by striking ‘‘diversification.’’ 1 and inserting ‘‘diversification, and’’; and 2 (3) by inserting at the end the following: 3 ‘‘(iii) the lifetime income disclosure 4 described in subparagraph (D)(i). 5 In the case of pension benefit statements de- 6 scribed in clause (i) of paragraph (1)(A), a life- 7 time income disclosure under clause (iii) of this 8 subparagraph shall only be required to be in- 9 cluded in one pension benefit statement during 10 any one 12-month period.’’. 11 (b) LIFETIME INCOME.—Paragraph (2) of section 12 105(a) of such Act (29 U.S.C. 1025(a)) is amended by 13 adding at the end the following: 14 ‘‘(D) LIFETIME INCOME DISCLOSURE.— 15 ‘‘(i) IN GENERAL.— 16 ‘‘(I) DISCLOSURE.—A lifetime in- 17 come disclosure shall set forth the life- 18 time income stream equivalent of the 19 total benefits accrued with respect to 20 the participant or beneficiary. 21 ‘‘(II) LIFETIME INCOME STREAM 22 EQUIVALENT OF THE TOTAL BENE- 23 FITS ACCRUED.—For purposes of this 24 subparagraph, the term ‘lifetime in- 25 VerDate Sep 11 2014 23:32 Apr 25, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H2367.IH H2367 kjohnson on DSK79L0C42 with BILLS 3 •HR 2367 IH come stream equivalent of the total 1 benefits accrued’ means the amount of 2 monthly payments the participant or 3 beneficiary would receive if the total 4 accrued benefits of such participant or 5 beneficiary were used to provide life- 6 time income streams described in sub- 7 clause (III), based on assumptions 8 specified in rules prescribed by the 9 Secretary. 10 ‘‘(III) LIFETIME INCOME 11 STREAMS.—The lifetime income 12 streams described in this subclause 13 are a qualified joint and survivor an- 14 nuity (as defined in section 205(d)), 15 based on assumptions specified in 16 rules prescribed by the Secretary, in- 17 cluding the assumption that the par- 18 ticipant or beneficiary has a spouse of 19 equal age, and a single life annuity. 20 Such lifetime income streams may 21 have a term certain or other features 22 to the extent permitted under rules 23 prescribed by the Secretary. 24 VerDate Sep 11 2014 23:32 Apr 25, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H2367.IH H2367 kjohnson on DSK79L0C42 with BILLS 4 •HR 2367 IH ‘‘(ii) MODEL DISCLOSURE.—Not later 1 than 1 year after the date of the enact- 2 ment of the Lifetime Income Disclosure 3 Act, the Secretary shall issue a model life- 4 time income disclosure, written in a man- 5 ner so as to be understood by the average 6 plan participant, that— 7 ‘‘(I) explains that the lifetime in- 8 come stream equivalent is only pro- 9 vided as an illustration; 10 ‘‘(II) explains that the actual 11 payments under the lifetime income 12 stream described in clause (i)(III) 13 that may be purchased with the total 14 benefits accrued will depend on nu- 15 merous factors and may vary substan- 16 tially from the lifetime income stream 17 equivalent in the disclosures; 18 ‘‘(III) explains the assumptions 19 upon which the lifetime income stream 20 equivalent was determined; and 21 ‘‘(IV) provides such other similar 22 explanations as the Secretary con- 23 siders appropriate. 24 VerDate Sep 11 2014 23:32 Apr 25, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H2367.IH H2367 kjohnson on DSK79L0C42 with BILLS 5 •HR 2367 IH ‘‘(iii) ASSUMPTIONS AND RULES.— 1 Not later than 1 year after the date of the 2 enactment of the Lifetime Income Disclo- 3 sure Act, the Secretary shall— 4 ‘‘(I) prescribe assumptions that 5 administrators of individual account 6 plans may use in converting total ac- 7 crued benefits into lifetime income 8 stream equivalents for purposes of 9 this subparagraph; and 10 ‘‘(II) issue interim final rules 11 under clause (i). 12 In prescribing assumptions under sub- 13 clause (I), the Secretary may prescribe a 14 single set of specific assumptions (in which 15 case the Secretary may issue tables or fac- 16 tors that facilitate such conversions), or 17 ranges of permissible assumptions. To the 18 extent that an accrued benefit is or may be 19 invested in a lifetime income stream de- 20 scribed in clause (i)(III), the assumptions 21 prescribed under subclause (I) shall, to the 22 extent appropriate, permit administrators 23 of individual account plans to use the 24 amounts payable under such lifetime in- 25 VerDate Sep 11 2014 23:32 Apr 25, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H2367.IH H2367 kjohnson on DSK79L0C42 with BILLS 6 •HR 2367 IH come stream as a lifetime income stream 1 equivalent. 2 ‘‘(iv) LIMITATION ON LIABILITY.—No 3 plan fiduciary, plan sponsor, or other per- 4 son shall have any liability under this title 5 solely by reason of the provision of lifetime 6 income stream equivalents which are de- 7 rived in accordance with the assumptions 8 and rules described in clause (iii) and 9 which include the explanations contained in 10 the model lifetime income disclosure de- 11 scribed in clause (ii). This clause shall 12 apply without regard to whether the provi- 13 sion of such lifetime income stream equiva- 14 lent is required by subparagraph (B)(iii). 15 ‘‘(v) EFFECTIVE DATE.—The require- 16 ment in subparagraph (B)(iii) shall apply 17 to pension benefit statements furnished 18 more than 12 months after the latest of 19 the issuance by the Secretary of— 20 ‘‘(I) interim final rules under 21 clause (i); 22 ‘‘(II) the model disclosure under 23 clause (ii); or 24 VerDate Sep 11 2014 23:32 Apr 25, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H2367.IH H2367 kjohnson on DSK79L0C42 with BILLS 7 •HR 2367 IH ‘‘(III) the assumptions under 1 clause (iii).’’. 2 Æ VerDate Sep 11 2014 23:32 Apr 25, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6301 E:\BILLS\H2367.IH H2367 kjohnson on DSK79L0C42 with BILLS