On May 8, the Department of Labor (DOL) published proposed rules for modifying DC plan participants’ annual benefit statements. In addition to showing benefit accruals, the rule could require an estimate of the “lifetime stream of payments” in retirement. The proposed rule and related information are at www.dol.gov/ebsa.

DOL lifetime income calculator
The Department of Labor’s Lifetime Income Calculator.

DOL is going down this road because it believes “participants may have difficulty envisioning the lifetime monthly income that can be generated from an account balance.” The best way to understand EBSA’s methodology is to test its calculator.

EBSA assumes (for now) that the participant’s wages will increase by 3 percent per year, and the DC plan will average a 7 percent nominal annual investment return, and inflation will average 3 percent annually. For calculating the income stream, EBSA annuitizes the inflation-adjusted retirement-age balance using the 10-year constant maturity Treasury interest rate.

Complete your profile to continue reading and get FREE access to BenefitsPRO.com, part of your ALM digital membership.

Your access to unlimited BenefitsPRO.com content isn’t changing.
Once you are an ALM digital member, you’ll receive:

  • Critical BenefitsPRO.com information including cutting edge post-reform success strategies, access to educational webcasts and videos, resources from industry leaders, and informative Newsletters.
  • Exclusive discounts on ALM, BenefitsPRO magazine and BenefitsPRO.com events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com

Already have an account?



Join BenefitsPRO

Don’t miss crucial news and insights you need to navigate the shifting employee benefits industry. Join BenefitsPRO.com now!

  • Unlimited access to BenefitsPRO.com - your roadmap to thriving in a disrupted environment
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com
  • Exclusive discounts on BenefitsPRO.com and ALM events.

Already have an account? Sign In Now
Join BenefitsPRO

Copyright © 2023 ALM Global, LLC. All Rights Reserved.