In a bipartisan effort, Senator Jeff Bingaman (D-NM), along with co-sponsors Herb Kohl (D-WA) and Johnny Isakson (R-GA), has introduced Senate Bill 267, the Lifetime Income Disclosure Act. I would provide you with a link to the actual bill language here, but there is this little problem: it's not yet made it to the Government Printing Office (GPO), nor has it made it to Senator Bingaman's web site. For those who want to read the actual language in the future, I suggest you go to the Library of Congress web site: http://thomas.loc.gov and search on S 267.
Readers do not want the delay inherent in the GPO. If you are here, you want your news now. So, without further adieu, away we go (my tribute to Jackie Gleason). Sponsors of defined contribution (DC) plans will be required to provide participants with annual statements that are patterned after Social Security statements. They will be required to show a participant's projected lifetime income based on a number of assumptions (none of which, IMHO, will actually come true). To relieve plan sponsors of "material burden", the Department of Labor (DOL) will be directed to provide a model disclosure as well as tables to assist plan sponsors in preparing these statements.
This could be interesting. If the assumptions that are mandated or recommended by the DOL are reasonable, roughly half of plan participants will fail to have balances sufficient to support the disclosed annuities. Bring on the cavalry -- plaintiff's bar. But, who will they sue? Plan sponsors? The DOL? Congress?
This is a step in the right direction, though. A bill like this will at least get people thinking about how much annual income their account balances might provide. But, this is at best Step 5 or 6. Step 1 needs to be in the schools. By the time a participant gets into the workforce, he or she needs to have enough financial literacy to understand things like this. But, that's a different rant for a different day. In the meantime, I applaud these three senators for their efforts and I'll keep you informed as this bill moves along.