Industry trade associations applauded a new rule today from the Trump administration requiring retirement plans to provide an illustration of the amount of monthly income that might be generated by an individual’s retirement savings.

The rule was mandated in the Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019.

The SECURE Act required a participant’s accrued benefits to be included on his or her pension benefit statement as a current account balance, and as an estimated lifetime stream of payments.

Using assumptions set forth in the rule, plan administrators will show participants equivalents of their retirement savings as monthly income under two potential scenarios – first, as a single life income stream, and second, as an income stream that factors in a survivor benefit.

“Our goal is to help workers and retirees understand how savings translate to retirement income,” said acting assistant secretary of labor for the Employee Benefits Security Administration Jeanne Klinefelter Wilson. “Defined contribution plan savings are meant to stretch across the years of retirement. When workers are reminded of what their balances could mean in terms of an estimated monthly dollar amount, they can use this information to plan both savings and spending.”

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