Pocan, Messer Help Americans Better Plan for Retirement
WASHINGTON, D.C.—U.S. Representatives Mark Pocan (WI-02) and Luke Messer (IN-06) today introduced legislation to help working Americans better plan for retirement.
For most members of the workforce, a combination of Social Security and 401(k) savings or an Individual Retirement Account (IRA) will provide them with monthly income when they retire. Unfortunately, nearly 60% of American workers have never calculated how much money they will need to save to live comfortably in retirement.
The Lifetime Income Disclosure Act (H.R. 2317), introduced by Messer and Pocan would help change that. Under the bill, certain retirement plans, like 401(k)s would be required to include what’s called an “annuity equivalent” on a participant’s statement. That means, on each statement, a person’s current retirement balance will be illustrated as if they were receiving a monthly paycheck for life.
“This is a small but important step when it comes to helping American workers plan for retirement,” said Messer. “Showing someone the value of their retirement account balance as a monthly income payment will give them a better of idea of how much they are saving and whether or not it’s enough to enjoy a comfortable standard of living after leaving the workforce.”
Said Congressman Pocan of the Lifetime Income Disclosure Act, “Seeing how retirement savings translate into an expected monthly payment is a powerful way for workers to see their retirement security grow and drives home the importance of saving early and often. The Social Security Administration already discloses benefits in terms of monthly income. This bill creates a similar straightforward tool to help workers with employer sponsored retirement plans determine if they are on track to meeting their retirement goals.”
A study by the National Bureau of Economic Research found that workers who saw their savings illustrated as monthly income were better informed about retirement planning, were more likely to know how much to save and had higher confidence in their expected retirement income.
This week, Senators Johnny Isakson (R-GA) and Chris Murphy (D-CT) introduced companion legislation in the Senate (S. 1317).
Original cosponsors of the Lifetime Income Disclosure Act include Congressmen Jared Polis (CO-02), Dave Reichert (WS-08) and Ron Kind (WI-03)
Supporters of bill include: American Council of Life Insurers, American Retirement Association, Insured Retirement Institute, MassMutual, Pension Rights Center, Prudential, TIAA-CREF and Women’s Institute for a Secure Retirement.