DOL Clarifies Lifetime Income Disclosure Requirement

On July 26, 2021, the Department of Labor ( "DOL") issued a brief set of Frequently Asked Questions (the "FAQs") clarifying certain issues related to the interim final rule (the "IFR") implementing the lifetime income illustration ("LII") requirement in section 203 of the Setting Every Community Up for Retirement Enhancement Act of 2019 (the "SECURE Act"). The FAQs should clear up any remaining ambiguity about the effective date of the LII requirement.  DOL also used the FAQs to signal its intention to issue a final rule, though the timing is still unclear.  Plan sponsors and providers may want to proceed cautiously, as the LII disclosure rules could change.

I. Background

Section 203 of the SECURE Act amended the Employee Retirement Income Security Act of 1974 ("ERISA") to require 401(k) and other defined contribution plans to include an LII annually as part of participant benefit statements.  The provision was intended to help participants understand how much