WealthManagement.com reported that the Department of Labor (DOL) released an interim final rule and a FAQ list to clarify requirements but plans to issue the final rule “as soon as practicable.” The publication spoke to benefits and executive compensation partner Brad Campbell about what to expect from the DOL’s lifetime income disclosure rule.
With the fall regulatory calendar published in Dec. 2021, Campbell said this indicated that the DOL is on schedule to issue a final rule in Feb. 2022. Whether the agency will meet that target is an open question, Campbell noted, given that it was originally scheduled for July 2021 and other DOL rules are behind schedule, as well.
Further, Campbell stated that the rule’s delay could be an indication of upcoming substantive changes. According to the publication, one possible change could be to the income projection method the DOL used in the interim final rule, which takes the participant’s account balance at the end of the period and assumes that person is age 67 and retiring with that balance. Campbell explained that this approach is not a “particularly useful projection” for a worker with a 40-year career ahead of them.
Regarding how the current rule allows plans to use more realistic methods for both the accumulation and retirement income phases, Campbell added, “There are a lot of recordkeepers who are providing much more sophisticated educational tools that people can use to make similar calculations.”