Posted on August 18, 2020

Regulation Will Encourage Consumers to Plan and Save for Retirement

WASHINGTON, D.C. -- The U.S. Labor Department today issued an interim final rule to establish a requirement for retirement plans to provide an illustration of the amount of monthly income that might be generated by an individual’s retirement savings. This regulation implements a key provision of the Setting Every Community Up for Retirement Enhancement (SECURE) Act that was a priority for the Insured Retirement Institute (IRI).

IRI is reviewing the interim final rule carefully but is optimistic that this will help consumers and promote increased retirement savings.

“This is a critical provision of the SECURE Act that IRI fought hard to include,” said Jason Berkowitz, IRI Chief Legal and Regulatory Affairs Officer. “An illustration that translates retirement account balances into monthly income helps consumers to think of retirement savings more like a paycheck than a lump sum. The rule also should encourage workers to save more for retirement.”

Research by IRI overwhelmingly shows that workers want these estimates and would actively save more for retirement if lifetime income estimates were provided on statements. Ninety percent of workers said they want these illustration estimates on their plan statements and find them useful, and 75 percent of workers said they would increase their retirement plan contributions after seeing these estimates.

“We look forward to working with the Department to implement an effective rule that will greatly benefit consumers’ ability to plan for and achieve a financially secure and dignified retirement,” Berkowitz said.

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Contact: Dan Zielinski