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WASHINGTON – U.S. Senators Johnny Isakson, R-Ga., and Chris Murphy, D-Conn., today reintroduced bipartisan legislation to help Americans plan in advance and ensure they do not outlive their retirement savings.

With the shift to 401(k) plans, American workers have become increasingly responsible for putting savings into and managing their retirement investments. However, studies have found that many Americans are not saving enough, and they are unsure how quickly or slowly to draw down their savings in their retirement years.

The Lifetime Income Disclosure Act, S.1574, introduced once again by Isakson and Murphy, would require 401(k) plan sponsors to inform participating workers of the projected monthly income they could expect at retirement based on their current account balance.

“We’re working to ensure Americans have all the information they need to make informed decisions about their retirement investments early on, because the last thing they should have to worry about is running out of savings during their retirement years,” said Isakson. “This information not only helps today’s workers to plan ahead, but promotes increased savings while they are still in the work force. I’m proud to join Senator Murphy to once again introduce this important legislation.”

“Too many people in Connecticut worry about saving for retirement while also paying bills, putting kids through college, and caring for older loved ones. I’m proud to team up with Senator Isakson to introduce the Lifetime Income Disclosure Act. Our bipartisan bill gives people more transparent information about their retirement savings. There’s a lot we can do to help people save for retirement, and giving people clear information to help them make smarter decisions about their retirement savings is a good first step,” said Murphy.

The Lifetime Income Disclosure Act is patterned on the Social Security Administration’s annual statements, which are mailed each year to working Americans to inform them of their estimated monthly benefits based on their current earnings. Congress mandated annual Social Security statements in 1989, and they have proven to be very useful to workers in preparing for retirement.

By providing similar information for 401(k) plans, the Lifetime Income Disclosure Act would give American workers a more complete snapshot of their projected income in retirement.

Specifically, under the act, defined contribution plans subject to Employee Retirement Income Security Act of 1974 - including 401(k) plans - would be required annually to inform participants of how their account balance would translate into a monthly income stream based on age at retirement and other factors.

To ensure there is no material burden or potential liability on employers who voluntarily sponsor 401(k) plans, the legislation directs the Department of Labor to issue tables that employers may use in calculating an annuity equivalent, as well as a model disclosure. Employers and service providers using the model disclosure and following the prescribed assumptions and Department of Labor rules would be insulated from liability.

Companion legislation, H.R. 2367, was introduced in the U.S. House of Representatives on April 25 by U.S. Reps. Mark Pocan, D-Wis.-02, and Ted Budd, R-N.C.-13. 

Isakson and Murphy previously introduced the legislation in 2015 and 2017.

Full text of the legislation is available here