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EBSA Addresses Timing of Lifetime Income Disclosures

Regulatory Compliance

Under a set of Frequently Asked Questions issued by the Department of Labor’s Employee Benefits Security Administration (EBSA), participant-directed plans now have a firm compliance date to provide lifetime income illustrations (LII).

Plans which must issue quarterly statements under ERISA Section 105 can incorporate their first LII on any quarterly statement up to the second calendar quarter of 2022, ending June 30, 2022, according to the July 26 FAQs. This is consistent with recommendations made by the American Retirement Association in its comment letter on the Interim Final Rule (IFR). 


The SECURE Act, enacted in December 2019, amended ERISA to add two LIIs, furnished at least annually, to pension benefit statements for individual account plans. The disclosures are to illustrate the monthly payments the participant would receive if the total account balance were used to provide lifetime income streams, including a qualified joint and survivor annuity for the participant and the participant’s surviving spouse and a single life annuity. 

Among other things, Congress directed the DOL to issue an IFR explaining how to calculate the LIIs, along with model language that explains the illustrations and assumptions, within 12 months of enactment. In response, the DOL on Sept. 18, 2020, published an IFR regarding the information that must be provided. 

The IFR also requested comments on the requirements and methodologies of the regulation. EBSA notes that it received 36 submissions in its request for comments, with several requesting clarification on the applicability date of the IFR and the method for furnishing benefit statements, and in some cases requesting transition relief. 

Participant-directed Plans

Regarding the second-quarter due date, the FAQs explain that participant-directed individual account plans that furnish quarterly benefit statements must include the LIIs on only one pension benefit statement in any 12-month period. 

Accordingly, because plans must furnish the LIIs at least annually, plans that issue quarterly statements must first comply with the IFR on a benefit statement for a quarter ending within 12 months after the Sept. 18, 2021, effective date. As such, this would not permit a delay beyond the second calendar quarter of 2022, because the ending date of the third calendar quarter—Sept. 30, 2022—would be after the expiration of the 12-month period, the FAQs note.  

Other Plans

For plans where a participant or beneficiary has his or her own account but does not have the right to direct the investment of assets in that account, the FAQs advise that the lifetime income illustrations must be on the statement for the first plan year ending on or after Sept. 19, 2021.

For most such plans, this will be the statement for calendar year 2021, which would be furnished no later than the last date for timely filing of the annual return for that year for a calendar year plan (Oct. 15, 2022), EBSA notes. 

Additional Lifetime Income Illustrations

The FAQs also provide some leeway with respect to providing lifetime income illustrations based on the framework provided in a 2013 Advance Notice of Proposed Rulemaking (ANPRM) will fulfill a plan’s obligation under the IFR. “Although the SECURE Act requires plan administrators to provide participants with lifetime income illustrations that differ from the illustrations proposed in the Department’s 2013 ANPRM, the Department’s rule specifically allows for additional lifetime income illustrations,” the FAQs state. 

EBSA notes that this permission was based on its recognition that many retirement plans have been providing various types of illustrations for several years, including in some cases illustrations of the type contemplated by the ANPRM. 

Transition Relief? 

The FAQs seemed a bit more noncommittal with respect to whether the EBSA would provide transition relief if a final rule were not issued significantly in advance of Sept. 18, 2021, effective date. 

EBSA says that it intends to issue a final rule “as soon as practicable” based on feedback from comments received during the public comment period on the IFR. “We appreciate the commenters’ concerns about the burdens and challenges that could arise if the Department issues a final rule that differs materially from the IFR without sufficient transition time for plan administrators to accommodate any changes from the IFR,” the FAQs state.