PLANSPONSOR - February/March 2020 - 38
TOTAL BENEFITS
Income Insight
The SECURE Act will bring uniformity to lifetime income projections
E
xecutive vice president of the eponymous
retirement plan insurance
firm Dietrich, in Philadelphia,
Geoffrey Dietrich, says of the Setting
Every Community Up for Retirement
Enhancement (SECURE) Act, he is most
excited about the mandatory disclosure
of lifetime income projections on participant
statements.
" I think the projections will wake
up participants and plan sponsors, and
cause them to change their mindset about
things such as annuities, " he says. " It will
help move us from accumulation to decumulation
mindsets. "
Most retirement plan providers that
responded to the 2019 PLANSPONSOR
Recordkeeping Survey already express
account balances in some form of lifetime
income stream, but, Dietrich says,
the new mandate will help bring an
38 PLANSPONSOR.COM February - March 2020
important measure of uniformity to the
information plan participants receive.
Today, providers that do generate lifetime
income projections for plan participants
do so with varying degrees of sophistication
and different points of focus-and
only some display such disclosures prominently
on websites or benefit statements.
Under the SECURE Act, the projection
of lifetime income is defined with much
more specificity.
As expressed in the text of the act, a
lifetime income disclosure " shall set forth
the lifetime income stream equivalent of
the total benefits accrued with respect
to the participant or beneficiary. " In
turn, the term " lifetime income stream
equivalent of the total benefits accrued "
is defined as " the amount of monthly
payments the participant or beneficiary
would receive if the total accrued benefits
of such participant or beneficiary were
used to provide a lifetime income stream,
... based on assumptions specified in rules
prescribed by the [Department of Labor
(DOL)] secretary. " The disclosures are
required to be provided in at least one
participant benefit statement during a
12-month period.
Under the SECURE Act, a participant's
accrued benefits " lifetime income
stream " will be presented in two ways:
as a single life annuity and as a qualified
joint and survivor annuity. While it leaves
much discretion to the DOL, the law
enumerates such conversion assumptions
as whether the participant or beneficiary
has a spouse of equal age.
Dietrich notes that the SECURE Act
has given the DOL 12 months to come
up with a model framework that plan
sponsors and providers will be able to
Art by Aya Kakeda
http://www.PLANSPONSOR.COM
PLANSPONSOR - February/March 2020
Table of Contents for the Digital Edition of PLANSPONSOR - February/March 2020
The Case for a Process
2020 PLANSPONSOR Best in Class 401(k) Plans
A Changed Perspective
Seize the Opportunity
Ready As It Goes
Income Insight
Good Read
PLANSPONSOR - February/March 2020 - Cover1
PLANSPONSOR - February/March 2020 - Cover2
PLANSPONSOR - February/March 2020 - 1
PLANSPONSOR - February/March 2020 - 2
PLANSPONSOR - February/March 2020 - 3
PLANSPONSOR - February/March 2020 - 4
PLANSPONSOR - February/March 2020 - 5
PLANSPONSOR - February/March 2020 - 6
PLANSPONSOR - February/March 2020 - 7
PLANSPONSOR - February/March 2020 - 8
PLANSPONSOR - February/March 2020 - 9
PLANSPONSOR - February/March 2020 - 10
PLANSPONSOR - February/March 2020 - 11
PLANSPONSOR - February/March 2020 - 12
PLANSPONSOR - February/March 2020 - 13
PLANSPONSOR - February/March 2020 - The Case for a Process
PLANSPONSOR - February/March 2020 - 15
PLANSPONSOR - February/March 2020 - 16
PLANSPONSOR - February/March 2020 - 17
PLANSPONSOR - February/March 2020 - 18
PLANSPONSOR - February/March 2020 - 19
PLANSPONSOR - February/March 2020 - 2020 PLANSPONSOR Best in Class 401(k) Plans
PLANSPONSOR - February/March 2020 - 21
PLANSPONSOR - February/March 2020 - 22
PLANSPONSOR - February/March 2020 - 23
PLANSPONSOR - February/March 2020 - 24
PLANSPONSOR - February/March 2020 - 25
PLANSPONSOR - February/March 2020 - 26
PLANSPONSOR - February/March 2020 - 27
PLANSPONSOR - February/March 2020 - 28
PLANSPONSOR - February/March 2020 - 29
PLANSPONSOR - February/March 2020 - A Changed Perspective
PLANSPONSOR - February/March 2020 - 31
PLANSPONSOR - February/March 2020 - 32
PLANSPONSOR - February/March 2020 - 33
PLANSPONSOR - February/March 2020 - Seize the Opportunity
PLANSPONSOR - February/March 2020 - 35
PLANSPONSOR - February/March 2020 - Ready As It Goes
PLANSPONSOR - February/March 2020 - 37
PLANSPONSOR - February/March 2020 - Income Insight
PLANSPONSOR - February/March 2020 - 39
PLANSPONSOR - February/March 2020 - Good Read
PLANSPONSOR - February/March 2020 - 41
PLANSPONSOR - February/March 2020 - 42
PLANSPONSOR - February/March 2020 - 43
PLANSPONSOR - February/March 2020 - 44
PLANSPONSOR - February/March 2020 - 45
PLANSPONSOR - February/March 2020 - 46
PLANSPONSOR - February/March 2020 - 47
PLANSPONSOR - February/March 2020 - 48
PLANSPONSOR - February/March 2020 - Cover3
PLANSPONSOR - February/March 2020 - Cover4
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