Compliance June 8, 2015

Bill Seeks More Digital Retirement Plan Communication

A group of Republican and Democratic members of the U.S. House introduced the Receiving Electronic Statements to Improve Retiree Earnings (RETIRE) Act.
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Representatives Jared Polis (D-Colorado), Phil Roe (R-Tennessee), Ron Kind (D-Wisconsin) and Mike Kelly (R-Pennsylvania) introduced bipartisan legislation last week they say would modernize the way employers communicate important retirement information by allowing plan sponsors to automatically opt participants into electronic delivery of documents. 

According to the lawmakers, the Receiving Electronic Statements to Improve Retiree Earnings (RETIRE) Act would “catch up with Americans’ overwhelming shift towards digital communication while providing strong protections for those who prefer to receive paper documents.”

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The representatives suggest that, under current law, employers “waste significant money and paper mailing documents like notices, disclosures and statements to retirees.” They estimate sending just one four-page notice to all U.S. retirement plan participants can cost up to $60 million on net—a number they call a conservative estimate.

“The RETIRE Act would reduce mailing costs, protect our environment by eliminating thousands of pieces of paper mailed each day, and make information more accessible to recipients,” says Representative Polis. “It’s time to bring our retirement information delivery capabilities into the 21st century.”

Representative Roe adds that today, more and more Americans are choosing to manage their finances online. “Our bill allows plan sponsors to auto-enroll beneficiaries into receiving plan documents electronically, while allowing those who prefer paper statements to continue receiving them at no cost,” he says.

Representative Kelly, who is co-chairman of the House Retirement Security Caucus, says employers who voluntarily offer 401(k) plans are “currently hampered by arcane and costly administrative rules for disseminating this information.”

“Our legislation will allow retirement management companies, such as Vanguard in my home state, to offer their consumers a way to receive information about plans electronically,” he says. “This will reduce costs for consumers and providers alike. It’s a win-win solution.”

The bill has already received marks of support from a number of retirement advocacy groups and product providers, including Vanguard. Martha King, managing director and head of Vanguard Institutional Investor Group, opines that electronic delivery “will enable us to better educate participants through linking to online tools and customized content that we believe will lead to better investing results … Vanguard commends the introduction of the RETIRE Act as it will provide a more cost-effective and efficient way for defined contribution plan providers to deliver important information to plan participants in a timely manner.”

Additional supporters of the bill include TIAA-CREF, SPARK Institute and American Benefits Council (see "Electronic Disclosure Rules Are So Last Century"). 

Text of the legislation is here.

Deals & People June 8, 2015

New Executive Director Joins SPARK

The SPARK Institute Inc. appointed a new executive director, Timothy Rouse.
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In his new role, Rouse will assume day-to-day responsibilities for managing the organization. He will represent the SPARK Institute’s mission on behalf of its members to a wide range of industry professionals, and key constituencies such as regulators, legislators and media.

“When I think of the 83 million American workers that SPARK and its member organizations represent, I know how critical SPARK’s voice is to shaping retirement policy in Washington. It is our obligation to our fellow Americans to do all that we can to help fulfill their dreams of a secure retirement. So I am honored to be able to help lead SPARK in this effort,” says Rouse.

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Rouse has more than 30 years of financial service experience, primarily in the retirement plan industry. His previous retirement experience includes extensive sales and revenue growth responsibilities, analyzing and shaping legislative proposals that included direct efforts associated with educating and lobbying policymakers. Prior to joining SPARK as executive director, Rouse worked at Voya Financial Services, Fidelity Investments, ICMA Retirement Corporation and Vanguard.

“Tim brings a tremendous amount of experience, energy and, most importantly, a passion for our goal to shape national retirement policy by providing research, education and comments on pending matters related to helping millions of Americans enjoy a secure retirement,” says Joseph Ready, president of The SPARK Institute. “The Governing Board members of SPARK are excited to have Tim in the executive director role and are confident that he will continue the rich tradition at SPARK to help millions of Americans achieve retirement security through the use of workplace retirement plans.”

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