United States Code

USC most recently checked for updates: Feb 26, 2024

§ 1025.
Reporting of participant’s benefit rights
(a)
Requirements to provide pension benefit statements
(1)
Requirements
(A)
Individual account plan
The administrator of an individual account plan (other than a one-participant retirement plan described in section 1021(i)(8)(B) of this title) shall furnish a pension benefit statement—
(i)
at least once each calendar quarter to a participant or beneficiary who has the right to direct the investment of assets in his or her account under the plan,
(ii)
at least once each calendar year to a participant or beneficiary who has his or her own account under the plan but does not have the right to direct the investment of assets in that account, and
(iii)
upon written request to a plan beneficiary not described in clause (i) or (ii).
(B)
Defined benefit plan
The administrator of a defined benefit plan (other than a one-participant retirement plan described in section 1021(i)(8)(B) of this title) shall furnish a pension benefit statement—
(i)
at least once every 3 years to each participant with a nonforfeitable accrued benefit and who is employed by the employer maintaining the plan at the time the statement is to be furnished, and
(ii)
to a participant or beneficiary of the plan upon written request.
Information furnished under clause (i) to a participant may be based on reasonable estimates determined under regulations prescribed by the Secretary, in consultation with the Pension Benefit Guaranty Corporation.
(2)
Statements
(A)
In general
A pension benefit statement under paragraph (1)—
(i)
shall indicate, on the basis of the latest available information—
(I)
the total benefits accrued, and
(II)
the nonforfeitable pension benefits, if any, which have accrued, or the earliest date on which benefits will become nonforfeitable,
(ii)
shall include an explanation of any permitted disparity under section 401(l) of title 26 or any floor-offset arrangement that may be applied in determining any accrued benefits described in clause (i),
(iii)
shall be written in a manner calculated to be understood by the average plan participant, and
(iv)
may be delivered in written, electronic, or other appropriate form to the extent such form is reasonably accessible to the participant or beneficiary.
(B)
Additional information
In the case of an individual account plan, any pension benefit statement under clause (i) or (ii) of paragraph (1)(A) shall include—
(i)
the value of each investment to which assets in the individual account have been allocated, determined as of the most recent valuation date under the plan, including the value of any assets held in the form of employer securities, without regard to whether such securities were contributed by the plan sponsor or acquired at the direction of the plan or of the participant or beneficiary,
(ii)
in the case of a pension benefit statement under paragraph (1)(A)(i)—
(I)
an explanation of any limitations or restrictions on any right of the participant or beneficiary under the plan to direct an investment,
(II)
an explanation, written in a manner calculated to be understood by the average plan participant, of the importance, for the long-term retirement security of participants and beneficiaries, of a well-balanced and diversified investment portfolio, including a statement of the risk that holding more than 20 percent of a portfolio in the security of one entity (such as employer securities) may not be adequately diversified, and
(III)
a notice directing the participant or beneficiary to the Internet website of the Department of Labor for sources of information on individual investing and diversification, and
(iii)
the lifetime income disclosure described in subparagraph (D)(i).
In the case of pension benefit statements described in clause (i) of paragraph (1)(A), a lifetime income disclosure under clause (iii) of this subparagraph shall be required to be included in only one pension benefit statement during any one 12-month period.
(C)
Alternative notice
The requirements of subparagraph (A)(i)(II) are met if, at least annually and in accordance with requirements of the Secretary, the plan—
(i)
updates the information described in such paragraph which is provided in the pension benefit statement, or
(ii)
provides in a separate statement such information as is necessary to enable a participant or beneficiary to determine their nonforfeitable vested benefits.
(D)
Lifetime income disclosure
(i)
In general
(I)
Disclosure

A lifetime income disclosure shall set forth the lifetime income stream equivalent of the total benefits accrued with respect to the participant or beneficiary.

(II)
Lifetime income stream equivalent of the total benefits accrued

For purposes of this subparagraph, the term “lifetime income stream equivalent of the total benefits accrued” means the amount of monthly payments the participant or beneficiary would receive if the total accrued benefits of such participant or beneficiary were used to provide lifetime income streams described in subclause (III), based on assumptions specified in rules prescribed by the Secretary.

(III)
Lifetime income streams

The lifetime income streams described in this subclause are a qualified joint and survivor annuity (as defined in section 1055(d) of this title), based on assumptions specified in rules prescribed by the Secretary, including the assumption that the participant or beneficiary has a spouse of equal age, and a single life annuity. Such lifetime income streams may have a term certain or other features to the extent permitted under rules prescribed by the Secretary.

(ii)
Model disclosure
Not later than 1 year after December 20, 2019, the Secretary shall issue a model lifetime income disclosure, written in a manner so as to be understood by the average plan participant, which—
(I)
explains that the lifetime income stream equivalent is only provided as an illustration;
(II)
explains that the actual payments under the lifetime income stream described in clause (i)(III) which may be purchased with the total benefits accrued will depend on numerous factors and may vary substantially from the lifetime income stream equivalent in the disclosures;
(III)
explains the assumptions upon which the lifetime income stream equivalent was determined; and
(IV)
provides such other similar explanations as the Secretary considers appropriate.
(iii)
Assumptions and rules
Not later than 1 year after December 20, 2019, the Secretary shall—
(I)
prescribe assumptions which administrators of individual account plans may use in converting total accrued benefits into lifetime income stream equivalents for purposes of this subparagraph; and
(II)
issue interim final rules under clause (i).
 In prescribing assumptions under subclause (I), the Secretary may prescribe a single set of specific assumptions (in which case the Secretary may issue tables or factors which facilitate such conversions), or ranges of permissible assumptions. To the extent that an accrued benefit is or may be invested in a lifetime income stream described in clause (i)(III), the assumptions prescribed under subclause (I) shall, to the extent appropriate, permit administrators of individual account plans to use the amounts payable under such lifetime income stream as a lifetime income stream equivalent.
(iv)
Limitation on liability

No plan fiduciary, plan sponsor, or other person shall have any liability under this subchapter solely by reason of the provision of lifetime income stream equivalents which are derived in accordance with the assumptions and rules described in clause (iii) and which include the explanations contained in the model lifetime income disclosure described in clause (ii). This clause shall apply without regard to whether the provision of such lifetime income stream equivalent is required by subparagraph (B)(iii).

(v)
Effective date
The requirement in subparagraph (B)(iii) shall apply to pension benefit statements furnished more than 12 months after the latest of the issuance by the Secretary of—
(I)
interim final rules under clause (i);
(II)
the model disclosure under clause (ii); or
(III)
the assumptions under clause (iii).
(3)
Defined benefit plans
(A)
Alternative notice

In the case of a defined benefit plan, the requirements of paragraph (1)(B)(i) shall be treated as met with respect to a participant if at least once each year the administrator provides to the participant notice of the availability of the pension benefit statement and the ways in which the participant may obtain such statement. Such notice may be delivered in written, electronic, or other appropriate form to the extent such form is reasonably accessible to the participant.

(B)
Years in which no benefits accrue

The Secretary may provide that years in which no employee or former employee benefits (within the meaning of section 410(b) of title 26) under the plan need not be taken into account in determining the 3-year period under paragraph (1)(B)(i).

(b)
Limitation on number of statements

In no case shall a participant or beneficiary of a plan be entitled to more than 1 statement described in subparagraph (A)(iii) or (B)(ii) of subsection (a)(1), whichever is applicable, in any 12-month period.

(c)
Individual statement furnished by administrator to participants setting forth information in administrator’s Internal Revenue registration statement and notification of forfeitable benefits

Each administrator required to register under section 6057 of title 26 shall, before the expiration of the time prescribed for such registration, furnish to each participant described in subsection (a)(2)(C) of such section, an individual statement setting forth the information with respect to such participant required to be contained in the registration statement required by section 6057(a)(2) of title 26. Such statement shall also include a notice to the participant of any benefits which are forfeitable if the participant dies before a certain date.

(Pub. L. 93–406, title I, § 105, Sept. 2, 1974, 88 Stat. 849; Pub. L. 98–397, title I, § 106, Aug. 23, 1984, 98 Stat. 1436; Pub. L. 101–239, title VII, §§ 7891(a)(1), 7894(b)(5), Dec. 19, 1989, 103 Stat. 2445, 2448; Pub. L. 109–280, title V, § 508(a)(1)–(2)(B), Aug. 17, 2006, 120 Stat. 949, 951; Pub. L. 116–94, div. O, title II, § 203, Dec. 20, 2019, 133 Stat. 3163; Pub. L. 117–328, div. T, title III, § 338(a), Dec. 29, 2022, 136 Stat. 5373.)
cite as: 29 USC 1025