Saturday, April 03, 2010

"Out" Spoken

About two months ago, the Department of Labor asked the public for some insights on retirement income via a request for information, or RFI.

The RFI sought input on what it termed a “broad range” of topics, including the pros and cons of distributing benefits as a lifestream of income, why lump sums are chosen more often, what kind of information participants need to make informed decisions on retirement income products, their ideas about participant disclosures of retirement income, and developments in the marketplace (1).

The comment period is just about two months old now, and with 30 days left, I thought it might be interesting to see what kinds of comments have come in (the Labor Department posts these comments on their Web site (2)).

The good news—nearly 500 comments!

The not-so-good news—as broad as the DoL’s scope of inquiry was, very few of the comments really seemed to be on point.

Now, in point of fact, I saw very few comments (yet) from providers, industry organizations, or even advisers (did see a couple of familiar names); doubtless those are in process. I’ve little doubt that on an issue this important—and with trillions of dollars at stake—there will be additional comments in both the quantity and quality that this issue surely deserves (3).

It was nonetheless interesting, IMHO, to see so many contributions from “regular” people—401(k) participants (and ex-participants) of every age from across the country. In addition to the voIume of responses, I was similarly taken by their passion and, from what I could discern, a certain singularity of purpose.

Based on my Good Friday perusal, the most common sentiment expressed was “keep the government away from my 401(k).” Now, there were flavors of that, of course, but it was a clear, consistent, and vibrant message, nonetheless. Most of these seemed to be from individuals concerned that the DoL’s RFI was little more than a stalking horse for the proposal put forth by Teresa Ghilarducci that suggested that the federal government should give people a chance to convert their 401(k)s into a government-sponsored annuity (see “The Plot to Kill the 401(k)”).

Another sub-group pointed to the fiscal challenges looming over Social Security, and, in no uncertain terms, told those reading their comments that the federal government should put its own house in order before trying to “fix” 401(k)s. Some were simply frustrated with the level of government debt, others the (apparently) growing level of government involvement in their lives (4). Many were simply worried that, having worked hard and saved diligently, the federal government now stood ready to step in and “take” theirs in order to spread it around to others who hadn’t been as prudent (5). (It should also be noted that a distinct minority liked the notion of some kind of government intervention to shield their retirement savings against the turmoil to which their balances had been subjected.)

Now, it would be easy to discount those responses. After all, there was nothing in the Labor Department’s request for information to suggest that the groundwork was being laid for some kind of government takeover; no reason to conclude that seeking insights on why more don’t voluntarily opt for annuities is tantamount to plotting to force people to do so. At best, some might say, these are misplaced ventings against things that have nothing to do with the issue at hand.

However, IMHO, it seems to me to be a sign of something more. I’m struck by the fact that individuals, spurred perhaps by some as-yet-unidentified provocation, took the time to take a public stand in support of their 401(k) and their willingness to take personal responsibility. Nor is it just words alone—that level of commitment has been borne out in any number of surveys that show workers, even in these trying economic times, increasing deferral rates to fill those depleted account balances.

Even so, it’s nice to see a bunch of dedicated participants still willing to put their “mouth” where their money is.

—Nevin E. Adams, JD


(1) A couple of weeks later, I dedicated a column to that effort (see “Safety ‘Knot’” at ), in which I outlined what was, effectively, 30 years’ worth of experience working with retirement plans—and nearly as long listening to plan sponsors and plan participants. In truth, I wasn’t doing so with an eye toward contributing to the DoL’s efforts directly, more or less viewing my role as trying to inspire those of you who work with these structures on the front lines to do so.

(2) You can check out the comments for yourself at http://www.dol.gov/ebsa/regs/cmt-1210-AB33.html

(3) Editor’s Note: It’s not too late to weigh in: Comments must be submitted on or before May 3, 2010. Members of the public can submit their input to the Department of Labor, RIN 1210-AB33, by one of the following methods:

Web: Federal eRulemaking Portal at www.regulations.gov. Follow the instructions for submitting comments.
E-mail: e-ORI@dol.gov. Include RIN 1210-AB33 in the subject line of the message.
Mail: Office of Regulations and Interpretations, Employee Benefits Security Administration, Room N-5655, U.S. Department of Labor, 200 Constitution Avenue, NW, Washington, DC 20210, Attention: Lifetime Income RFI.

(4) One commenter went so far as to sign his comment as a “Citizen Who actually saves, Living below my means Currently being punished for Wall Street's errors.”

(5) See also “IMHO: The Ant and the Grasshopper” at

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