KOHL RESPONDS TO FEDERAL REQUEST FOR INFORMATION ON RETIREMENT SECURITY, RELEASES GAO STUDY ON LIFETIME INCOME

WASHINGTON, D.C. - Today U.S. Senator Herb Kohl (D-WI), chairman of the Senate Special Committee on Aging, responded to a Request for Information (RFI) from the U.S. Department of Labor (DOL) and U.S. Department of Treasury (Treasury) on the topic of promoting retirement security, sharing with the agencies a report by the U.S. Government Accountability Office (GAO) examining the options retired Americans have for converting retirement savings into postretirement income. GAO also studied how pensions, annuities, and other retirement savings products are regulated.

 

"As more Americans rely on defined contribution plans, the choices they have to make in order to achieve a secure retirement have grown more complex. Not only do they have to make the proactive decision to save, but then they must decide how much to save, where to invest their savings, and how to make the best use of it when they retire. We're trying to make this process a little more user-friendly," Kohl said.

 

Kohl also shared with DOL and Treasury a bill he sponsored alongside Senators Jeff Bingaman (D-NM) and Johnny Isakson (R-GA) to help Americans translate their retirement savings into retirement income. The Lifetime Income Disclosure Act (S. 2832) would require 401(k) plan sponsors to inform participating workers of the projected monthly income they could expect at retirement based on their current account balance.

 

The measure is patterned on the Social Security Administration's annual statements, which are mailed annually to working Americans to inform them of estimated monthly benefits based on their current earnings. Congress mandated annual Social Security statements in 1989, and they have proven to be very useful to workers in preparing for retirement. By providing similar information for 401(k) plans, the Lifetime Income Disclosure Act would give American workers a more complete snapshot of their projected income in retirement.

 

On June 16, Senator Kohl will hold an Aging Committee hearing on turning retirement savings into lifetime income.

 

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