Georgia employees with 401(K)’s may be able to get more information on what they have in their accounts, if a bill introduced on December 4th in the U.S. Senate passes.
Georgia Senator Johnny Isakson (R-Georgia), joined by Senators Jeff Bingaman (D-New Mexico), and Herb Kohl (D-Wisconsin), have just introduced legislation that would require defined contribution plan sponsors to inform plan participants of the projected monthly income they could expect at retirement, based on their current account balance.
Called the Lifetime Income Disclosure Act (LIDA), which will be in 29 USC 1025, any lifetime annuity plans under ERISA would be required to annually tell participants how their balance would translate into guaranteed monthly payments at the plan’s normal retirement age, based upon several factors and assumptions.
The report mandated in the bill is modeled after the Social Security Administration’s annual statements. The press release accompanying the bill said that, “[b]y 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.”
The bill allows the Secretary to set up the math, based on several requirements. The measure is being backed by AARP, the Women’s Institute for a Secure Retirement, and the Retirement Security Project.
You can read the entire bill here.