+1 212 318 2000
Europe, Middle East, & Africa
+44 20 7330 7500
+65 6212 1000
MISSING PARTICIPANTS/LOST PLANS
Pension specialists recommended June 4 that the Department of Labor's Employee Benefits Security Administration develop a lost-plan registry to help individuals find retirement income when they have difficulty locating a former employer.
Lost plans are a “significant problem for our society,” especially because many people have not sufficiently saved for retirement, said Ellen A. Bruce, director of the Pension Action Center of the Gerontology Institute at the University of Massachusetts Boston. She advised the creation of a lost-plan registry to keep track of plans even when a company changes name or goes out of business.
In addition, J. Spencer Williams, president and chief executive officer of Retirement Clearinghouse in Charlotte, N.C., said that residency changes, job moves, and early mortality are three primary contributors to plans' having to track down missing or lost participants.
Another witness, Allison R. Klausner, assistant general counsel for benefits at Honeywell International Inc., speaking on behalf of the American Benefits Council, said the Department of Labor should consider establishing or expanding safe harbors for plan sponsors dealing with missing or lost participants of retirement plans.
A number of speakers told the Advisory Council that automatic enrollment and automatic escalation are the most effective plan design strategies for increasing participants' retirement savings, but more-robust default percentages would better protect retirees.
In addition, communicating income replacement projections to plan participants is "one of the best ways" to increase retirement savings, said Donn Hess, managing director for J.P. Morgan Retirement Plan Services in Kansas City, Mo., speaking on behalf of the American Benefits Council.
However, Jennifer Benz, chief executive officer and founder of Benz Communications in San Francisco, said more needs to be done to shift cultural views on retirement and suggested that DOL and other government agencies can assist in this goal by doing the heavy lifting for employers.
Robert S. Newman, a partner in Covington & Burling's Washington office told the Advisory Council that de-risking strategies to eliminate the volatility associated with pension obligations are essential to defined benefit plans' continuing existence, but that he did not suggest DOL adopt any specific guidance on the issue nor that the industry needs additional regulations on de-risking.
John G. Ferreira, a partner with Morgan Lewis in Pittsburgh, agreed that additional regulation is unnecessary and that new rules could result in unintended consequences.
A union representative, Ilana Boivie, research economist with the Communications Workers of America in Washington, added that de-risking is often not in plan participants' best interests and that plans need to take specific steps to protect the participants.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).