Instead of leaving Americans to educate themselves about retirement planning and saving, legislation introduced in the Senate this week would mandate that 401(k) and other defined contribution plans show beneficiaries the projected value of their retirement accounts.
Just as the Social Security Administration issues annual benefit projections, the Lifetime Income Disclosure Act, introduced by Sens. Jeff Bingaman, D-N.M., Johnny Isakson, R-Ga., and Herb Kohl, D-Wis., would require retirement plan sponsors to supply data on how much income a participant's account balance would generate per month at retirement. This income projection would be based on age at retirement and other factors. In 1989 Congress mandated the annual Social Security statements, which have helped workers prepare for retirement.