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Member, Beacon International Group, Ltd.
WASHINGTON—Legislation introduced in the Senate Thursday would require 401(k) and other defined contribution plan sponsors to inform participants how much income they could expect at retirement based on their current account balances.
The Lifetime Income Disclosure Act, intended to ensure that Americans don't outlive their retirement savings, was introduced by Sens. Jeff Bingaman, D-N.M.; Johnny Isakson, R-Ga.; and Herb Kohl, D-Wis.
The bill is spurred by concern that Americans aren't saving enough for their retirement. The lawmakers said in a news release that the bill was modeled on a law that requires the Social Security Administration to provide annual statements to workers on how large of a benefit they will be able to expect based on current earnings.
“Our bill is a common-sense approach to empowering Americans and helping them determine whether they are on a path to a secure retirement,” Sen. Bingaman said in the news release.
Doug Halonen is a reporter for Pensions & Investments, sister publication of Business Insurance.