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Tom - I think, as TPA's, we probably all know in whose lap the responsibility is likely to fall... Now it is time to rant a little bit. My own feeling is that the DOL should require only a website URL/LINK on the statement that refers them to the DOL website for the calculator. Then the DOL can have whatever assumptions they want on the calculator, as well as any disclaimer language, and the statements can have just a canned statement, developed by the DOL. This stuff about requiring the payment amounts on the statements is utter foolishness, and in my own cynical view, is being pushed (under the guise of helping participants) by those who have or will obtain a financial stake in lifetme payouts, as well as some well-meaning but sadly misguided do-gooders. I hasten to say that I have no evidence whatsoever to back up my cynicism. The simple fact is, whether you like it or not, that most participants in DC plans don't want, and will never take, a lifetime monthly payout option! Rant over. For now.

ESOP Guy: you mean the DOL's comments in the proposed regulation about avoiding potential lawsuits aren't reassuring to you? As to the concern about potential lawsuits based on unrealized expectations, the Department believes this issue might be addressed in two ways. First, benefit statements could include a clear and definitive statement that the lifetime income illustration is an estimate, based on specific assumptions, and not a guarantee. The Department believes this disclosure would serve to put participants and beneficiaries on notice that the illustration is only an estimate and, thereby, minimize the likelihood that they would believe the illustration is a promise or guarantee. The Department specifically requests comments on the extent to which the language in ANPRM § 2520.105–1©(6) would accomplish this result. Second, the Department is considering establishing a regulatory safe harbor under section 105 of ERISA for plan administrators to rely on when developing lifetime income illustrations for pension benefit statements. By specifying the precise standards and assumptions a plan administrator would use to make a lifetime income illustration on a pension benefit statement, a regulatory safe harbor would substantially reduce the likelihood of lawsuits against that administrator based on an imprudent or improper calculation of lifetime income.

We generally get copies of all statements sent directly to us and reconcile them - that is, go through every friggin' transaction and reconcile the cash account to the penny. We used to have all kinds of forms and whatnot that we used to ask clients about what happened during the year, but eventually learned that it's a lot better to just do it ourselves. (Consistent with my world view that pretty much everyone is a moron. I get a few pleasant surprises but it's better than constantly being disappointed.) The example I always cite to clients about why we insist on doing this is that once, $30,000 simply disappeared from a brokerage account. Because it was a managed account with a lot of activity, no one, and I mean no one (besides us) was aware of it. (It was transferred in error to another, unrelated account.) That's the only time something like that happened, but we are constantly correcting clients who tell us they contributed "x" when we see "y" being deposited.