Institutional Retirement Income Council Supports the Department of Labor’s Interim Final Rule on Lifetime Income Disclosures

Retirement Industry Think Tank Submits Comment Letter; Says Interim Final Rule Will Enhance Retirement Security if Final Rule Facilitates Projections of Participant’s Balances to Retirement Age

WASHINGTON, Oct. 14, 2020 (GLOBE NEWSWIRE) -- Saying the Interim Final Rule (IFR) was well crafted in its assumptions and standard language, the Institutional Retirement Income Council (IRIC), a non-profit think tank for the institutional retirement industry, agrees with the DOL’s IFR with one significant and notable enhancement. IRIC believes the IFR needs to facilitate the projection of a participant’s account balance in order to meet the stated Employee Benefits Security Administration’s (EBSA) objective to “help workers in defined contribution plans to better understand how their account balance translates into monthly income.”

In a comment letter submitted to the EBSA, IRIC applauds the EBSA’s efforts, assumptions and standardization of the disclosure language so that participants can receive consistent messaging regarding their guaranteed income and retirement security regardless of their employer, recordkeeper or other service providers.

“We believe the consistency of messaging created by the rule will reduce confusion while providing standardized statements to participants,” said Robert Melia, Executive Director of IRIC. “Participants nearing retirement will receive factual and consistent information on their retirement security that will reduce their financial stress giving them a realistic idea of their potential guaranteed income.”

In its letter to the EBSA, IRIC encouraged the EBSA to find a way to project balances to retirement age instead of providing the income that would be provided with a participant’s current balance. In the letter, IRIC notes that a millennial who is early in his or her savings would not receive meaningful information unless service providers and plan sponsors are able to project their current balances and provide income illustrations on those projected balances.

William Charyk, IRIC president, commented, “The IFR, as it currently is structured, would provide to a young participant, whose career and retirement savings have just begun, a statement that would show a very low monthly income equivalent when expressed as a life annuity commencing at retirement age. In many cases, young participants may see a projected monthly retirement income of only $10 or less since the rule does not allow employers to project the impact of future contributions to or earnings on the participant’s account balance without losing the safe harbor protection afforded to employers in the IFR and as contemplated in the SECURE Act.  We believe illustrations, based solely on a modest current account balance with no projections for earnings or future contributions, would be unmeaningful at best, and a likely source of confusion and discouragement.”

Knowing that plan sponsors are risk adverse and will generally want to stay within the limitations of liability, IRIC offers the EBSA several ways to modify the IFR and put sponsors’ concerns at ease.

“In 2013, when the EBSA tried to issue regulations regarding income illustrations in their Advance Notice of Proposed Rule Making, the EBSA supported using reasonable assumptions when projecting participant balances. So, we contend the EBSA believes that projections are important and needed to provide all participants more meaningful information as participants try to assess their retirement readiness through their careers,” notes Melia.

“Overall, we are excited to see the provision of the SECURE act become integrated into the fabric of the defined contribution industry. The fiduciary safe harbors, the portability provisions and especially the guaranteed income illustrations through this IFR will continue to advance the policy objective of enhanced retirement security through the adoption of guaranteed income within our DC retirement industry,” concluded Charyk.

NOTE TO EDITORS: To obtain a copy of the comment letter, or speak with an IRIC executive, contact Ed Emerman at Eagle Public Relations, or 609.240.2766.

About The Institutional Retirement Income Council

The Institutional Retirement Income Council (IRIC) is a non-profit, membership-based organization of industry advisors who are dedicated to sharing best practices, informing about legislative and regulatory issues, and facilitating solutions for plan sponsors and their participants. IRIC’s mission is to facilitate the culture shift of defined contribution plans from supplemental savings programs to programs that provide retirement security. By providing a forum for insightful, solutions-oriented thought leadership on institutional retirement income, IRIC is promoting the need for retirement income adequacy for defined contribution plan participants. For more information, visit

Media Contact:
Ed Emerman