The EBSA is seeking input for possible regulations on lifetime-income statements for defined contribution plan participants.
An advance notice of proposed rule-making published May 8 in the Federal Register notes the Department of Labor's Employee Benefits Security Administration is considering requiring accrued benefits to be expressed as both an account balance and an estimated lifetime stream of payments.
The EBSA website offers an online calculator to illustrate an annuitization approach that also could be part of the forthcoming rules. It can be found at www.dol.gov/ebsa/regs/lifetimeincomecalculator.html.
The rule-making process could allow for “reasonable” projections and safe-harbor assumptions about contributions and retirement ages. EBSA officials assumed a 7% rate of return on investments and a 3% discount rate for projected account balances, based on historical market returns and future projections, according to the notice, which said the agency “intends to consider all reasonable alternatives to direct regulation.”
Comments are due by July 8. — HAZEL BRADFORD
