Effective date for participant-directed plans. Section 105 of the Employee Retirement Income Security Act (ERISA) requires that administrators of participant-directed individual account plans provide participants with quarterly pension benefit statements. However, such quarterly benefit statements are required to include the lifetime income illustrations only once in any 12-month period. Therefore, given the September 18, 2021 effective date for the Interim Rule, plans that issue quarterly statements have until the quarter ending June 30, 2022, to include the first lifetime income illustration.
Effective date for non-participant-directed plans. For non-participant-directed plans that are required to furnish a pension benefit statement only once each calendar year, the lifetime income illustrations must be included on the benefit statement for the first plan year that ends on or after September 19, 2021. For most such plans, this means that lifetime income illustrations must be included on the statement for calendar year 2021, which would be furnished to participants on or before October 15, 2022 (i.e., the last date to timely file the annual return for 2021 for a calendar-year plan).
The DOL also clarified that lifetime income illustrations based on the DOL framework published in its Advance Notice of Proposed Rulemaking in 2013 are sufficient to satisfy the requirements under the Interim Rule and acknowledged the potential burdens and challenges that could arise for plan administrators if the DOL issues a final rule that differs materially from the Interim Rule without sufficient transition time to accommodate such changes.
To discuss these issues in more detail and learn how they may apply to your plan, contact your Sidley lawyer or the authors listed below.