The Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act) requires that defined contribution plans provide participants with two new “lifetime income illustrations” at least annually. The new disclosure must provide two alternative illustrations of the estimated monthly payments assuming their account balance was converted into a stream of lifetime payments:

·        a single life annuity (with payments over the participant’s lifetime)

·        a qualified joint and survivor annuity (with equal payments over the participant and spouse’s lifetime).

EAC Tools provides this calculation based on the Department of Labor’s Employee Benefits Security Administration (EBSA) interim final rule (IFR). You can insert a sheet that has a pre-formatted table to help you set up the calculation based on your assumptions for:

·        Interest:                 10-year constant maturity Treasury rate as of the first business day of the last month of the statement period. These rates are downloaded by the user monthly from the Federal Reserve.

·        Mortality:               Gender neutral mortality table specified in Code Section 417(e)(3)(B). These tables are in the EAC Tools library of mortality tables, updated annually.

·        Calculation date:   The interest and mortality are automatically determined based on the calculation date, which is also used to determine the age.

The calculation is based on the following: