By Andy Stonehouse
As the lone federal official
to make it to the third day of ASPPA's hurricane-struck national conference just south of Washington D.C., Pension Benefit Guarantee Corporation director Josh Gotbaum earned plenty of applause.
But Gotbaum received more positive feelings for his assertion that those in the retirement industry really are doing important work - sometimes, in spite of a raft of government regulations and roadblocks that make both DB and DC plans a challenging prospect.
"Retirement security is kind of like the weather - everybody talks about it, but nobody does anything about it," he said.
And to that end, Gotbaum said the agency is continuing to work to improve its customer service
- a tangible example of which was the decision to mail out pension benefit checks to some 140,000 recipients last week, based on the not-incorrect assumption that government offices would close as a result of then-Hurricane Sandy.
"Our job is to encourage the private retirement system in general, just as you do, and it's a job that not getting easier." Gotbaum said. "But we have the same job. And you and your clients are my clients, too. We're trying to preserve the plans we still have. But we need more flexibility and more options. And we're also looking for ways to offer lifetime income benefits without employers being given life-long financial obligations."
Despite normally being well under the radar, the PBGC leader said he and his organization got their 15 minutes of fame earlier this year when he loudly and successfully challenged the owners of American Airlines to maintain pension benefits for some 130,000 employees, rather than scrapping them as part of the airline's bankruptcy plan.
Gotbaum, a former director of TD Bank, said he's also been sensitive to the real-world concerns of retirement advisors and plan administrators as they help participants and employers deal with increasingly difficult retirement planning options.
As proof, he said PBGC has worked to try to modify ERISA
reporting regulations to make the lives of small plan administrators a little easier. New reportable events regulations are due next year, he said, which will likely exempt small plans from being forced to file as much paperwork; he's also pushing for changes that won't require plans of less than 100 participants to file extra documentation during shutdowns.
"We're also working to simplify the PBGC premium formula - though we know it still has to be complicated enough that your clients need you to do it for them," he added. Future changes, he said, will try to correct the Catch-22 that requires administrators to calculate PBGC rates before they actually get data from their clients.
The organization is also trying to fix an electronic filing snafu which prevents actuaries from using the PBGC's web-based filing resources on behalf of plan administrators.
Gotbaum admits that the DB and DC industry is hampered by prohibitively complicated legislation that ultimately is forcing more and more plan sponsors to consider simpler retirement options - or, in many cases, no retirement benefits at all for employees.
"Much of the law is written so narrowly and in such detail that we feel we don't have the ability to use our own judgment, so you need to talk to Congress. But Congress doesn't like doing pension law - there's never really a good time to do pension law, so there's a delay. And a lot of small businesses are getting out of retirement plans altogether, and that's a tragedy.
Originally published on BenefitsPro.com