-----Original Message----- 

From: KEN Harris [mailto:KHARRIS@epic1st.com] 

Sent: Wednesday, February 03, 2010 11:22 AM 

To: EBSA, E-ORI - EBSA 

Subject: Comments on Lifetime Income Options for Plan Participants 

The advantages and disadvantages of distributing benefits as a lifetime 

stream of income both for workers and employers, and why lump sum 

distributions are chosen more often than a lifetime income option. 

~ The sole benefit to this method is that it gives a income stream that 

is consistent. Clients can build a life that is set to a fixed income 

and plan accordingly (assuming that the ins company pays what they said 

they would pay). Many people like that. 

~ Disadvantage is that most of these products are really expensive and 

pay high commissions. The client is sacrificing potential for good 

returns in exchange for "piece of mind" consistent performance. 

~ Generally, clients are taking lump sum distributions because they are 

seeking guidance from a professional and the pro tells them to take the 

lump sum so they can manage it and combine the assets with the clients 

other assets and have full control. 

l The type of information participants need to make informed decisions 

in selecting the form of retirement income. 

~ Generally, clients will never take the time or effort to educate 

themselves. The options are too confusing and/ or complex for 99% of 

the people out there. And, most people don't care enough or figure it 

isn't worth trying to figure out. 

l Disclosure of participants' retirement income in the form of account 

balances as well as in the form of lifetime streams of payment. 

~ If a life time stream of income is an option, it would need to be 

aggressively sent to clients that this is a "life time" option and 

should be treated as a life time choice. Moving in and out is not a 

good idea and should be avoided at all costs. Old School DB plans were 

great because clients never knew anything and didn't want to know 

anything, they had no control and never had the opportunity to mess it 

up. 

~ We will never educate or prepare our populous for proper control, so 

therefor we must seek to make it as hands off as possible. 

l Developments in the marketplace that relate to annuities and other 

lifetime income options. 

~ Annuities and lifetime options are becoming better, but with the 

collapse of the mega insurers in the last 2 years, many annuities shops 

are reeling in the tactics and their products have become much more 

conservative and returns are severely lacking. Basically, these options 

are still way too confusing and expensive. I mean come on, the ins 

company is guaranteeing 3.5% and you know they're pulling down over 6%. 

that is 2.5% in undisclosed fees! Plus they are usually hammering the 

employer with billables north of $3-5,000. 

Pension and 401(k) is the wild west. If the gov't is serious about 

fixing it, there needs to be a complete system overhaul and real 
industry experts need to be brought in. People that understand annuity 

and mutual fund fee make up. People that understand process and 

available options (Administration and record keeping systems and 

ongoing due diligence, plan document strategies, taxation, hard dollar 

vs soft dollar fees, etc). 

These questions just illustrate how far off the gov't is in their 

research. 

Kenneth A. Harris Jr. QPFC 

Regional 401(k) Specialist 

Epic Advisors 

150 State St, Suite 200 

Rochester, NY 14614 

O:(585) 232-9060 ext 218 

C:(585) 205-0083 

kharris@epic1st.com 

http://www.getretirementright.com

http://www.epic1st.com/OurServices/SpecificToRIAs/

 

>>> JEAN DAILEY 2/3/2010 8:17 AM >>> 

From CCH On-line Research Service: 

NEWS, DDU, ¶97F Labor Department Seeks Comments on Lifetime Income 

Options for Plan Participants; Labor Department News Release No. 

09-1571-NAT, February 2, 2010 (Submitted to CCH online (Feb. 03, 2010)) 

Labor Department Seeks Comments on Lifetime Income Options for Plan 

Participants; Labor Department News Release No. 09-1571-NAT, February 

2, 2010 

The Labor and Treasury Departments have issued a request for 

information (RFI) soliciting public comments to assist the Agencies in 

determining what steps to take to enhance retirement security for 

workers in employer-sponsored retirement plans through lifetime 

annuities or other arrangements that provide a stream of income after 

retiring. 

WASHINGTON - The U.S. Departments of Labor and the Treasury today 

announced the publication of a request for information (RFI) soliciting 

public comments to assist the agencies in determining what steps to 

take to enhance retirement security for workers in employer-sponsored 

retirement plans through lifetime annuities or other arrangements that 

provide a stream of income after retiring. The RFI appears in today's 

edition of the Federal Register. 

"Today's initiative is particularly important given the shift from 

defined benefit plans that offer employees lifetime annuities to 401(k) 
and other defined contribution plans that typically distribute 

retirement savings in a lump sum payment," said Phyllis C. Borzi, 

assistant secretary for the Labor Department's Employee Benefits 

Security Administration. 

The RFI seeks comments on a broad range of topics, including: 

l The advantages and disadvantages of distributing benefits as a 

lifetime stream of income both for workers and employers, and why lump 

sum distributions are chosen more often than a lifetime income option. 

l The type of information participants need to make informed decisions 

in selecting the form of retirement income. 

l Disclosure of participants' retirement income in the form of account 

balances as well as in the form of lifetime streams of payment. 

l Developments in the marketplace that relate to annuities and other 

lifetime income options. 

Written comments responding to the lifetime income RFI may be addressed 

to the U.S. Department of Labor, Office of Regulations and 

Interpretations, Employee Benefits Security Administration, N-5655, 200 

Constitution Ave. NW, Washington, DC 20210, Attn: Lifetime Income RFI. 

The public also may submit comments electronically by email to EORI@dol.gov or through the federal e-rulemaking portal at 

http://www.regulations.gov. 

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