DOL Publishes FAQ Clarifying When Lifetime Income Illustrations Should Be Provided | Knowledge



Effective date of member-directed plans. Section 105 of the Employees’ Retirement Income Security Act (ERISA) requires administrators of member-directed individual account plans to provide members with quarterly pension benefit statements. However, these quarterly benefit statements should only include the lifetime income illustrations once per 12 month period. Therefore, given the effective date of September 18, 2021 for the interim rule, plans that issue quarterly statements have until the quarter ending June 30, 2022 to include the first lifetime income illustration.

Effective date for plans not managed by members. For plans not managed by members who are required to provide a statement of pension benefits only once per calendar year, the lifetime income illustrations must be included on the statement of benefits for the first year of the plan that ends on the 19th. September 2021 or after. such plans, this means that lifetime income illustrations must be included on the statement for the 2021 calendar year, which would be provided to participants no later than October 15, 2022 (i.e. annual plan).

The DOL also clarified that the lifetime income illustrations based on the DOL framework published in its 2013 regulatory proposal notice are sufficient to meet the requirements of the interim rule and recognized the potential burdens and challenges that could arise for plan administrators if the DOL issues a final rule that differs significantly from the interim rule without sufficient transition time to accommodate such changes.

To discuss these questions in more detail and find out how they may apply to your plan, contact your Sidley attorney or the authors listed below.


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