Workers who participate in 401(k) plans would be greatly served if a bill that has just been reintroduced in the Senate's Committee on Health, Education, Labor and Pension is passed.

The Lifetime Income Disclosure Act would require 401(k) plans to equip participants with statements that would indicate how much their retirement savings balances would pay out each month, if set up as an annuity.

The bill would require the Department of Labor to issue guidelines on how to calculate that figure.

In many ways, this is an even more important number that the balance, as it would likely startle participants to see how little their savings would provide.

This clearly is the case for most participants, as Fidelity Investments reported that the average balance in the 401(k) plans that it administers reached $74,900 in the fourth quarter of 2010. an all-time high. And equates to $442 a month, if paid out as an immediate annuity.

The bill has attracted support of many influential groups, including the AARP, the National Women's Chamber of Commerce and the American Society of Pension Professionals and Actuaries. And the Employee Benefit Research Institute recently found in a survey that 90% of participants would like to see their estimated monthly income.

Indeed, there already is proof that such a tool would impact workers' savings rates.

Putnam Investments in January 2010 created a Lifetime Income Analysis Tool for the 401(k) plans that it administers. It shows workers how much monthly income their savings would generate in retirement and gives them an idea whether they are on track to maintain their current lifestyle once they stop working.

After a year of offering this tool, Putnam reported that nearly 34% of those who used the Lifetime Income Analysis Tool increased their savings rate from an average of 7% of gross income to 8.6%.

Edmund F. Murphy III, director of defined contribution services at Putnam, called the tool a great motivator. "Americans want to do the right thing as they prepare for retirement, but too often get distracted by market values and asset allocation pie charts instead of focusing on the bottom line: How much monthly income their savings are likely to produce once they are retired," Murphy said.

Seeing that monthly figure would likely startle many participants-but at least it would prompt them to boost their savings.

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