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AIR LINE PILOTS ASSOCIATION, INTERNATIONAL alpa

SCHEDULE WITH SAFETY AFFILIATED WITH AFL-CIO AND CLC

April 30, 2010 

VIA ELECTRONIC TRANSMISSION THROUGH 

Federal eRulemaking Portal: http://www.regulations.gov

Office of Regulations and Interpretations 

Employee Benefits Security Administration 

Attn: Lifetime Income RFI 

Room N-5655 

U.S. Department of Labor 

200 Constitution Avenue, NW 

Washington, DC 20210 

Re: RIN 1210-AB33 

To the Office of Regulations and Interpretations: 

 I am writing to you with a few brief comments regarding the Request for 

Information (“RFI”) Regarding Lifetime Income Options for Participants and 

Beneficiaries in Retirement Plans released on February 2, 2010. This letter is sent on 

behalf of the Air Line Pilots Association International (“ALPA”), the principal union 

representing the nation’s commercial airline pilots. ALPA represents approximately 

53,000 pilots at 38 airlines in the United States, most of who are participants in 401(k) 

employer-sponsored retirement plans. 

 ALPA is in support of the intent to establish and clarify regulatory rules and 

statutory requirements for the optional provision of lifetime for the disbursement of 

accrued and vested retirement benefits, through an annuity contract, guaranteed minimum 

income withdrawal agreement, or similar arrangement. For such types of optional 

offering (by plan sponsor decision) and voluntary participation (by plan participant 

decision) arrangements, we believe it is essential that participants and beneficiaries are 

provided with extensive, comprehensible and timely information concerning required and 

potential commitments, costs and benefits. 

The RFI features thirty-nine specific questions allocated among eight categories. Instead 

of responding to each question, we are providing you with a few choice replies and 

comments. Our specific comments and concerns on the proposed regulations include: 

a.) Participant Demand: Most ALPA pilot 401(k) plans do not currently offer in-plan 

retirement income products or services. While we have not undertaken a survey 

to determine participant interest on this feature, our anecdotal observations are 

that a notable but minority percentage of participants do have an interest as long 

as it were to include: voluntary instead of mandatory participation; affordable and 

transparent costs; various enrollment (during contribution phase as well as at end 
of service) options; and with flexible (term certain, beneficial (joint lives), 

lifetime and inflation-adjusted) distribution choices. 

b.) Portability and Continuity Concerns: Retirement plans have complex 

administration, record keeping and custody processes and systems that are in 

place to assure the integrity, safekeeping and continuity of plan assets and 

participant account values. Various vendors contract with employers and plan 

oversight committees to provide this underlying infrastructure. Each vendor has a 

proprietary program that may limit its ability to accommodate certain investment 

program, such as retirement-income services. For myriad reasons, retirement 

plans often need to change vendors, which may result in discontinuity of some 

plan features. It is critical that any future laws or regulations regarding qualified 

retirement plan income solutions address if and how changes in plan status or plan 

vendor agreements will affect plan participants. 

c.) Participant Choice: A one-size-fits-all retirement income solution would not be 

appropriate. Each plan participant has individual needs, motivations and 

circumstances that will influence his/her level of interest in a retirement-income 

solution. It is important that participants have discretion to decide when and to 

what extent to utilize this feature. 

d.) Costs: A marketplace in which private enterprise competes to develop, deliver 

and service retirement income solutions should be the objective of any laws or 

regulations established regarding qualified retirement plan income features. This 

type of competitive marketplace will foster innovation and result in cost-effective 

solutions. 

e.) Information and Disclosures: As the private sector provides retirement income 

solutions, it is vital that there are well-defined reporting requirements from 

retirement income service providers to plan sponsors and plan participants. These 

reporting requirements should identify features, benefits, costs and risks 

throughout (enrollment, pendency and termination) a participant’s involvement in 

the program. Reporting and disclosure requirements should also address the 

method, means and timing of information release. 

f.) Fiduciary Requirements and Exposures: Plan fiduciaries should be held to similar 

standards to those currently in place for the selection of qualified retirement plan 

service providers when choosing a retirement income solution. The establishment 

of safe-harbor selection and monitoring standards for Plan fiduciaries would help 

generate interest and resolve to consider retirement income solutions by Plan 

sponsors. 

g.) Protection of Benefits: A major concern is what would happen to retirement 

income program participant benefits if the service provider and guarantor failed to 

complete distribution commitments due to fraud, default, bankruptcy and other 

major event risk scenarios. We encourage consideration in future legislation or 

regulations the establishment of a mechanism to help protect and hold harmless 
participant accrued benefits s as much as reasonably possible in these types of 

situations. 

We trust that our comments will be given all due consideration. We look forward to your 

release of findings and deliberations on this matter. Thank you providing us the 

opportunity to comment and for your work on this important issue. 

Very truly yours, 

Capt. Bryan Green 

Chair, ALPA National Retirement & Insurance Committee