Projected Retirement

Sponsored by: MFS Investment Management 

One of the SECURE Act of 2019 provisions requires plan sponsors to provide a lifetime income projection to participants at least once a year. The purpose of this provision is to help participants have a better understanding of what their current retirement accounts will provide in terms of income in retirement, so they can make adjustments as needed. Now that we are a full year past the implementation deadline and plan sponsors have provided this documentation to participants, we asked if they felt that this provision accomplished what it was intended to achieve … or not. We asked members if they feel that the provided income disclosures have helped participants' understanding of their retirement readiness.

Nearly three-quarters of plan sponsors (73.7%) noted no discernable difference (with many stating that they don’t think participants even look at them) and only seven percent thought the disclosures have been helpful. Fifteen percent of respondents indicated that they felt that the disclosures have been confusing to participants. Comments follow.

• I haven’t even noticed the disclosure with my own account!
• Our RK is only using delivered language and won't make it 'user friendly' – it is not helpful; it is confusing; and it is not appreciated by our participants.
• We followed the DOL template which prompted a fair amount of confusion.
• With confusion... They could be helpful.  I wish the industry could make recommendations for consideration by federal agencies.
• Being only part of many participant's retirement savings, while the number is good to know, it changes when combined with other savings.
• Have not heard any feedback at all
• Have not received any feedback from participants either way.
• I don't believe our participants really look at these calculations/information
• I don't see this as an improvement, a lot of work for the providers with little participant impact.
• I don't think EEs understand the documents and/or read the documents. The documents don't go out to EEs that do not participate in the plan; there is an audience that is naturally missed.
• I don't think people even look at them.
• I don't think people pay much attention to the notices. If they do, for most it doesn't stick for longer than a couple of days
• I have not noticed any changes nor have I myself received any questions from my colleagues on this disclosure.
• I have not received any response or questions on the disclosures from our participants.
• I think the vast majority of participants do not read any of the legal notices, or just skim over them.
• I would certainly hope so; however, I haven't received any feedback.
• I'm not sure participants are even paying attention to it.  No change from before.
• It's been silent for our plan participants, but I haven't asked either!
• Personally, I like the info...I am not sure I have seen a change in participant behavior.
• They were slipped into statements and I don't even think most participants noticed them
• Some employees read them some just file them and pay no attention
• They disclosures are not confusing, just only are a small part of the participants' holdings so not really relevant
• One of the reasons we re with Empower, they've done a great job with the visualization
• We seem to have had an upward trend in participants electing higher deferral % during the past year+. Unsure if the annual lifetime income disclosures have had any bearing on this trend.