August 20, 2021

ThinkAdvisor Provides an Overview of Faegre Drinker Webinar on DOL Lifetime Income Annuity Interim Rule

ThinkAdvisor shared comments from benefits and executive compensation partners Brad Campbell and Fred Reish during Faegre Drinker’s “Inside the Beltway” webinar. The publication described how the retirement planning community is awaiting a final rule from the Department of Labor (DOL) on the delivery of lifetime income illustrations on plan participants’ benefit statements and that the DOL received feedback from the private sector on how to improve the rule.

In “DOL’s Lifetime Income Annuity Interim Rule Is Flawed, ERISA Lawyers Say,” Campbell said the interim final rule going into effect in September “is going to be confusing for folks, and I don’t think it’s going to achieve the goal that Congress had in the Secure Act; even though DOL’s rule may be a faithful interpretation of what Congress wrote, I don’t think it’s what any of us would want them to mean.”

Reish said that the Secure Act specified that the rule would not be effective “until a year after the DOL issues an interim final rule explaining how to do it.” And while the DOL “is working on a final regulation,” he stated, it hasn’t been sent to the White House yet for review by the Office of Management and Budget. Overall, “The process is behind schedule for providing the [lifetime income] information on quarterly statements” for Dec. 31.

As a result, Reish told ThinkAdvisor, “The delivery of the illustrations to participants could be delayed to after the Mar. 31 quarter or even after the June 30 quarter to allow time to review and digest the final regulation and to make any needed programming changes.” Overall, the attorneys expressed that the interim rule taking effect in September is flawed because the illustrations are unclear and don’t account for future earnings.

Campbell added that the delay in issuing a final rule suggests that the DOL “may be revisiting some of these decisions from the interim final rule,” noting the rule is “flawed as it is.”

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