DOL Considering Rules to Require Defined Contribution Plans to Show Projected Lifetime Benefits

The U.S. Department of Labor (DOL) is developing proposed regulations that would require "a participant's accrued benefits to be expressed on his pension benefit statement as an estimated lifetime stream of payments, in addition to being presented as an account balance." Additionally, the rules "would require a participant's accrued benefits to be projected to his retirement date and then converted to and expressed as an estimated lifetime stream of payments." The proposal, Employee Benefits Security Administration, 29 CFR Part 2520, RIN 1210-AB20, has raised some controversy, and the DOL has extended the comment period on the rule. Several large pension and employer organizations have expressed concerns about what standards would be used to do this, costs, and potential legal exposure.