One rule that the agency plans to finalize soon is its lifetime income illustrations rule. In 2020, the department unveiled an interim final rule that went into effect in 2021 and directed plan administrators, using assumptions set forth in the rule, to show participants equivalents of their retirement savings as monthly income under two potential scenarios — first, as a single life annuity; and second, as a qualified joint and survivor annuity that factors in a survivor benefit. The interim final rule came after Congress in 2019 passed the Setting Every Community up for Retirement Enhancement Act, a comprehensive retirement security package known as the SECURE Act, that directed the Labor Department to promulgate a regulation and issue a final rule.
The monthly estimates, which must appear on participants' benefits statements at least once annually, offer plan sponsors safe harbor protection from liability and are calculated as though the monthly estimated income were to begin immediately, meaning the estimates don't include potential retirement account earnings growth. The projections assume a retirement age of 67.
In a comment period before the interim final rule took effect, several stakeholders raised concerns that the projections assume that between a participant's current age and when they turn 67, their account earns zero.
The EBSA aims to issue a final rule by the end of May, according to its agenda, though the timeline has already been pushed back several times in recent years.
Separately, the EBSA is still working on a proposal to amend the regulatory definition of the term fiduciary "to more appropriately define when persons who render investment advice for a fee to employee benefit plans and IRAs are fiduciaries" within the meaning of the Employee Retirement Income Security Act and the Internal Revenue Code, according to a Labor Department explanation.
In its semiannual regulatory agenda released in June 2021, the EBSA said it planned to issue a notice of proposed rule-making on the fiduciary issue by December 2021. That timeline was then pushed back to December 2022, and the current agenda, which was released this week, still lists December 2022 as the planned timeline.
Also, the EBSA plans to issue a final rule by the end of April on prohibited transaction exemption procedures. In March, it unveiled a proposal that would change the way plan sponsors and others apply for prohibited transaction exemptions.
