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Department of Labor 

Employee Benefits Security Administration’s

Request for Information Regarding Lifetime Income Options for

Participants and Beneficiaries in Retirement Plans

RIN 1210–AB33

Comments Submitted To: 

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.

Comments Submitted By:

Ms. Shelly Singh 

ssingh@law.villanova.edu 

Comment submitted Regulations.gov 

March 16, 2010 

I. Introduction

I would like to welcome this opportunity to comment on the Employee Benefit 

Security Administration’s (“the Administration”) request for information regarding how 

the respective agencies can enhance the retirement security of participants in employer 

sponsored benefit plans and in individual retirement arrangements (IRAs). I write this 

comment in my capacity as an interested law student in employee benefits and as a 

future beneficiary of retirement benefits. While I am currently a second-year law 

student at Villanova University School of Law, my thoughts and ideas do not reflect 

those of Villanova or the School of Law. 

I do not believe it is necessary to make the move to forcefully annuitize defined 

contribution plans like 401(k)s. Instead, with both plans having benefits as well as 

risks, it would serve the public better to create a system where they are more

knowledgeable and informed of those benefits and risks. With a system of information 

like this, individuals can make the choice themselves as to which retirement plan best 

suits them instead of feeling stifled by the government agencies, who are essentially 

making the choice for them in creating a regulation like forced annuitization. 

Section II of this comment will give a brief background on the current state of 

our retirement system, and the pros and cons that have been observed in the current 

pension plans offered. Section III will provide suggestions on alternative solutions to 
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forced annuitization in increasing retirement security. These suggestions include 

creating systems that better inform the public of the risks and benefits of both type of 

pension plans, amending ERISA to require this output of information, broadening the 

options under the current defined Contribution Plans, and utilizing technology to 

disburse information to individuals. Finally, section IV contains a brief conclusion. 

II. Background 

The issue that has come to the forefront of this agency deals with the growing 

trend of sponsorship towards defined contribution plans over the more secure defined

benefit plans. As the Department of Labor has suggested, the defined contribution 

plans are riskier to individuals because they bear the risks of the investments they make. 

Additionally, defined contribution plans normally pay out to retirees in lump sums only, 

as opposed to defined benefit plans which offer life time annuities. Lifetime annuities 

guarantee a steady flow of income for the rest of the retirees life, whereas with a lump 

sum, there is a greater risk a retiree will overly spend and outlive their funds. Despite 

these anticipated downfalls, it is not necessary for the Department of Labor to take it 

upon themselves to create a more centralized retirement system forcing life time 

annuities. If individual investors were simply more informed of their retirement options 

and the risks and benefits of those options, they would make wise decisions on their 

own as to which plan is right for them.

With the recent sub-prime mortgage housing and credit crisis, and plunge 

in the stock market, the issue of retirement security has never been more prominent. 

Economists have reported that those right on the peak of or eligible for retirement had 

seen a drop in their median household worth between the years of 2004 and 2009. For 

example, those between the ages of 45 and 54 with a household net worth of about 

$150,000 in 2004 had seen a drop in their net worth to about $82,200 in 2009.1

 The 

baby boomers between the ages of 55 and 64, with perhaps more savings, also saw a 

drop in median household net worth of about $229,600 in 2004 to about $142,700 in 

2009.2

A significant retirement investment for many was in the housing market, and 

after it had collapsed so did many individuals’ retirement security. Many were counting 

on completely paying off the mortgages on their houses by the time they retired. After 

the housing collapse, however, those individuals were faced with having to pay large 

drawn out mortgages as if they were first time home buyers. Additionally, many, 

 These drops in income experienced by the age groups most presently close to

retirement, has increased the concern for retirement security and whether or not 

individuals will have enough money to comfortably live out the rest of their days. 

 

1

See The Problems of the Current System of Retirement Income: Hearing on 

Strengthening Worker Retirement Security Before the House Comm. On Education and 

Labor, 111th Cong. (2009) (testimony of Dean Baker). 

2 See id.
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especially baby boomers, lost lots of money they had invested in the stock market. 

With large sums of money being lost due to the housing crisis and fall of the stock 

market, prospective retirees are counting more and more on their pension plans to 

provide them with the security they need after retirement.

Currently, the Employee Retirement Income Security Act (ERISA) puts forth 

two pension plan options, defined benefit plans and defined contribution plansDefined

benefit plans offer a specific steady income after retirement through the beneficiary’s 

lifetime. Often the plan will return either a set amount, or an amount relative to work 

experience and salary that is made available from employer contributions. Thus, the 

employer and not employees are responsible for the investments made in those plans 

and must ensure that set return to employees will be available. Defined contribution 

plans on the other hand are usually private investments by or on behalf of the employee, 

which means they have no set return upon retirement, as the return is dependent on the 

success of the investments. In defined contribution plans usually the employee, 

employer, or both contribute to the plan. The most common defined contribution plans 

are 401(k)s, 403(b)s, employee stock ownership plans, and profit-sharing plans. 

A. Pros and Cons of Current Pension Plans

i. Defined Benefit Plans

The biggest benefit in defined benefit plans, as mentioned earlier, has to do with 

the security of having a set guaranteed flow of income after retirement. Because this is 

a secure amount promised to the employee upon retirement the risk of investment is 

thus borne on the employer, who has to ensure that the employee will get his promised 

amount. Defined benefit plans are covered by Pension Benefit Guarantee Corporation 

(“PBGC”) insurance, so in case an employer does make a wrong investment, the 

employee is still covered and will be guaranteed their set income upon retirement from 

the PBGC. Defined benefit plans are structured as deferred annuities, which means that 

an individual will only see pay out from their defined benefit plans upon retirement and 

no sooner. This provides security and protection because it prevents one from dipping 

into their retirement savings and using their pension funds early on before retirement. If 

one is allowed to dip into his retirement savings before hand, he increases his risk of 

either running low or running out of money before he even retires. 

Despite the benefits defined benefit plans offer, there are also some 

downfalls present in these types of plans. For example, defined benefit plans do not 

adjust or allow investors to take advantage of inflation, rather retirees are dependent on 

the nominal lifetime annuities they are guaranteed. This makes defined benefit plans

unattractive, especially now when there is a lot of uncertainty in the economy, where 

individuals feel more secure and in control of their retirement funds by being able to 

invest the money themselves. In addition, where liability is easier to determine in 

defined contribution plans, the amount of liability put on and determined to be by the 

sponsor tends to be more clouded and difficult to valuate. For example, if a company 
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were to close down do you evaluate the amount owed to an employee for their pension 

as the amount they would be entitled to at that exact time when the company closed, or 

is it necessary to take into account future earnings had the company not closed? 

Additionally, accrual in defined benefit plans are dependent on the rate of wage 

inflation which can create uncertainty or mean little accrual. Finally, defined benefit 

plans are less portable when one leaves or is terminated from employment, since their 

pension plans are based on salary and tenure with the company. 

ii. Defined Contribution Plans

Defined contribution plans are the most attractive when the economy is going 

through times of uncertainty and inflation, as is currently the case. Individuals are 

better able to predict their retirement outcome since they are the ones investing. 

Additionally, they can achieve a better return on successful investments as opposed to 

having to rely on the nominal annuities they would receive in defined contribution 

plans. Individuals are allowed to make the choice on their investments and are not tied 

down to their set annuities. In addition, individuals get to control the security of their 

own money, which is seen in a positive light by many especially when there is 

instability in the national economy. Defined contribution plans also see many tax 

benefits. For example, contributions to defined contribution plans by both employers 

and employees are deductible on both ends. Additionally, any return on investments 

made under defined contribution plans can accumulate tax-free. Finally, defined benefit 

plans are theoretically better for both employers and employees in the sense that since 

the payout is tied to the time worked with the company and high salary, there is a bigger 

incentive for employees to work that much harder to achieve a high salary in the end. 

This means better employees and better work product for companies. 

Defined contribution plans, like defined benefit plans, also see their fair share of 

risks and potential problems. The biggest risk lies in the private investment allowed by 

these types of plans. An uninformed or poor investment decision could lead to 

catastrophic results for an individual, because the individual is the one to bear the risk 

on those bad investments. This was illustrated in the unfortunate events that took place 

during the collapse of Enron. Many employees were misinformed and convinced to buy 

Enron stock for the 401(k)s. Once it was learned that the Enron execs had 

misappropriated the money and declared bankruptcy, thousands lost most if not all of 

their retirement earnings. Although Enron is an extreme situation, where they were

eventually held liable for their wrong doings, the risk taken on by those in this defined 

contribution plan was apparent as many still lost a lot of money. Unfortunately, defined 

contribution plans do not have PBGC insurance like defined benefit plans do. Defined

contribution plans are more transferrable from company to company if one quits or is 

terminated, unless however the defined contribution plans are also tied to salary and 

tenure, in which the effect would be the same as with defined benefit plans. 
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Another problem with defined contribution plans lies in the predictability of 

future income. Although individuals investing in defined contribution plans may have a 

better present sense predictability on the pension benefit they will earn, there is no way 

they can be certain of their future pension benefit when retirement rolls around. In 

addition, defined contribution plans are not based on a deferred annuity, which means 

an individual can dig into their pension plan at any time even if they have not retired 

yet. Like stated earlier, this means they bear the risk of potentially cleaning out their 

retirement fund or leaving it too low before they have even retired. This risk of 

outliving your retirement would possibly take negative effects on the welfare system, 

where other resources would then have to be utilized like social security and Medicaid. 

Although there are lower risk investments available, as well as deferred annuities 

available for purchase, that would be similar to the deferred annuities of defined benefit 

plans, it seems impractical that investors would be inclined to invest in lower risk, lower 

return investments under defined contribution plans. This would essentially defeat the 

purpose of defined contribution plans and individuals would be better off sticking to 

defined benefit plans. 

 As illustrated above, both the defined Contribution Plans and the defined Benefit 

Plans have their own risks and benefits. Each individual person is different and to one a 

more riskier plan that yields higher returns might be a more viable option, whereas to 

another a more stable plan that yields a guaranteed return might be the right plan for 

them. Either way, it should be left up to individuals themselves to decide how they 

want their retirement plans to pan out. They should be left to making that choice with 

the only aid by this agency being in thoroughly informing them the pros and cons of 

each plan.

III. Informing The Public Before Forcing Annuitization 

Forcing annuitization on the people will not be met with will, and it will become 

another point of contention of agencies being too strong, and interfering in the people’s 

lives unnecessarily. It will raise arguments that if agencies like the Department of 

Labor, can control our lives in retirement, where are the boundaries then set; what part 

of our lives will the government decide to control next because it is what “they believe 

is in our best interest?” Both the defined contribution plans and defined benefit plans

have their own benefits and downfalls, which is all the more reason each individual 

should be allowed to weigh those risks and benefits and make the decision on which 

retirement plan best suits them. The risks the government is concerned with for

individuals who chose defined contribution plans and lump sums over defined benefit 

plans and life time annuities is real and of genuine concern; however, these risks can be 

alleviated without the government forcing annuitization and essentially making 

retirement choices for people. 

 With that being said, a better way to lessen the risks posed by defined

contribution plans, while at the same time leaving the control in the hands of the 

individual to decide which plan they want, would be to take every measure possible to 
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fully disclose and inform the public about the risks of choosing one plan over another. 

Certain instances have shown that when money is managed by highly knowledgeable 

professional investors on behalf of individuals in defined benefit plans, the return they 

make is higher then what has been seen on the returns from defined contribution plans.3

A. Informationals at the Work Place 

 

This is exactly why individuals need to be better informed on investing for their 

retirement. The professional investors are getting better returns because they have the 

knowledge and information of what investments are better, risky, etc... If the same 

knowledge possessed by those professionals can be relayed to the general public, then 

individuals will be better at investing their retirement and will get the same returns in 

their defined contribution plans as the professionals are getting for them in the defined

benefit plans. 

 

The best place to begin teaching and informing individuals about their 

retirement options and financial investments is at the work place. The work place is 

where the retirement plans come to life and where they are offered to employees, so it 

would make the most sense to have the employer as the key component in educating 

individuals about their retirement options. Although some employers may have already 

implemented programs to provide some sort of retirement knowledge to their 

employees, because they are not required to do so by law, there is no oversight on what 

the programs actually teach and how they are run. Many of the programs may not be 

doing enough to effectively inform their employers into making good knowledgeable 

retirement decisions. 

Perhaps if the government required an informational to be implemented across 

the board by all employers, there could be some improvement in the knowledge 

obtained by employees. Instead of the government outright making the decision for the 

retiree, the program could address all the concerns the government has in retirees 

choosing defined contribution plans over defined benefit plans directly to the retirees 

themselves. The same decision making process the government essentially has gone 

through in determining defined benefit plans and lifetime annuities as a safer alternative 

to defined contribution plans, should be allowed to occur by the individuals as well. So

if the government, through these programs, reveals their decision making process 

directly to the individuals, then perhaps they will follow the same approach. This way 

they will come to the decision based on their own understanding of their retired life and 

options with government aid instead of government interference. 

Additionally, the type of information given to employees should be in relation to 

the age of the employee. Employees who are older and on the verge of retiring have 

probably already accumulated most of their retirement income. The information 

 

3 See Utah Retirement Systems, defined Benefit Plans (DB) vs. defined Contribution 

Plans (DC) (last visited Apr. 20, 2010) available at 

http://www.urs.org/general/pdf/db_vs_dc.pdf. 
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addressed to them should focus more on how and what to do with that money they 

already have accumulated once they retire, as opposed to how to invest and accumulate 

funds. One of the biggest risks in defined contribution plans is retirees outliving their 

funds when they are given their funds in a lump sum. If retirees through these 

informational programs at work are really taught this real risk of outliving funds, and 

how to plan accordingly and properly so as not to outlive them, the older employees 

will be better prepared to deal with their funds once they retire. Employees that are 

younger or still quite a ways from retiring, on the other hand, should be given 

information along the lines of investments. They should be informed of all the various 

investment options they have, what the risks mean, and what the returns mean, so if 

they do decide to invest on their own, they will have a more knowledgeable foundation 

to go off of. Especially with the recent recession and stock market plunge, it is now 

more crucial than ever for employees to have more formal financial knowledge to base 

their retirement investments on.

Although implementing such programs may present a cost to the employer, it 

would nominal in comparison to the cost to employees who make back uninformed 

retirement decisions. In addition, the employers can too benefit by providing this type 

of information to their employers. Employees would recognize the need for being 

better informed and would be happier with a workplace that provided that information. 

Thus, happier workers would mean better work product and productivity for employers, 

being an incentive in itself for employers to provide these such programs. 

Along with employers providing information to their employees about 

their retirement options, the State government’s should also play a role in informing the 

public about the risks involved in investment. The state governments are some of the 

largest employers employing many local and state employees, and teachers. Therefore, 

the State governments need to also provide information to their employees about their 

retirement options and risks. Especially in a time of recession, when individuals are 

more vulnerable and susceptible to making poor and rash decisions, it should be the 

responsibility of the State governments to provide the information to the public about 

investment risks and scams. 

B. ERISA should require the information 

Part of the requirements set forth in ERISA to employers, should be amended to 

include a mandatory informational program. As was mentioned earlier, the programs 

that are provided by some employers to the employees have no requirements or 

oversight, so there is no way of really knowing how effective these programs are at 

properly informing employees. The Department of Labor itself should not be the one to 

create the program. It should be left up to each employer to create an efficient program 

either within their own human resources department or through a third party, however, 

the Department of Labor should present some guidelines and requirements as to the 

extent and what type of information must be divulged to the employees. ERISA should 
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be amended to make these programs with these guidelines a mandatory requirement for 

all employers to implement and comply with.

 As ERISA stands now, there are no real mandatory disclosures required by the 

employer to the employees. The employers are required to disclose information about 

the plans to the Department of Labor and have to disclose information about the plans 

to the employees only if the employees themselves request for that information. 

Additionally, it is not required for the employer to provide the employee with 

calculations about his or her accrued investments, unless, again, the employee 

themselves request for that information. An employee that is young or just starting 

employment is likely not to be concerned about retirement or what type of plan the 

company provides. Therefore, it is very unlikely that a younger, newer employee would 

actually request for the information about the plan from their employer. ERISA should 

be amended so that it makes it mandatory for employers to give information about the 

plans they have to all employees regardless of whether they request that information or 

not. Additionally, employees that may not be as financially savvy, may not request 

from employers the calculations of their accrued investments, so ERISA should also 

require timely reports of calculations of each employees accrued pensions every so 

often (annually, every 5 years, etc...) even if the employee does not request for it. 

A bill has been recently introduced into legislation that puts forth a similar idea 

of forced disclosure called the Lifetime Income Disclosure Act. This bill would add an 

amendment to ERISA that would require sponsors of 401(k) plans to provide employees 

with a projection of what their monthly income would be upon retirement based on their 

current account balance under the plan. It has been modeled similar to the statements 

given out by the Social Security Administration that gives out annual statements of a 

workers social security benefits based on their earnings up to date. 

 A bill like this would be an excellent one that could help alleviate the risks 

posed by uninformed investors into their 401(k)’s. If they are provided with a 

projection of their income, they would be better informed of the risk and benefits of 

their investments without having to do the difficult calculations themselves. This would 

make investors more aware of the risk giving them a better incentive to switch to 

defined benefit plans of their own choice without the government having to force 

annuitization on them. Additionally, if they decide not to switch to defined benefit 

plans, at least employees will now be better informed of their future retirement situation 

and make proactive decisions based on that projection, like savings, investments in 

annuity based returns. It will give investors a clearly picture of their future retirement 

and allow them to make informed decisions based off that picture without the 

government having to interfere and make the decisions for them. 

Although criticisms have been raised about the complications in calculating a 

projected income, its benefits would still outweigh its burdens. It is true that confusions 

will arise as to what the correct procedure/method would be in calculating the 

projections, but this is one area where the government should be involved in retirement 

planning. The federal government could help establish a uniform calculating system or 

one that can be similarly modeled that each defined contribution plan sponsor would 
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have to use in providing the projected statements. Since the calculations could often be 

too complicated for workers themselves to understand, the government creating a 

system could also aid in oversight. If a sponsor is not properly calculating projections, 

which may not be known to the employee, a review of the system being used against the 

system the government sets up can alleviate fears of misleading employees who lack 

knowledge about the calculations. 

 One method of calculating projected income can be based on one’s life 

expectancy and health risks. The method of calculation can be similar to how health or 

life insurance providers calculate premiums. Health and life insurance companies often 

take into consideration many different aspects to calculate one’s life expectancy, such 

as genetic dispositions, preexisting conditions, current status of health, etc... With 

these factors, these insurance companies can estimate a life expectancy range and will 

determine premiums based on the life expectancy and/or health risks posed by an 

individual. Likewise, using similar factors, a retirement plan administrator can 

calculate and expected life expectancy, and thus give a more accurate projected 

retirement income. 

Concerns are raised that these projections if not explained well could mislead 

employees into a false sense of security. However that can be avoided by clear 

explanations and full disclosures of the calculations, which should also be required by 

the government. If anything, the benefits outweigh the false sense of security risk 

because workers are being forced to continuously be aware of and concerned of their 

pensions by receiving these statements, whereas before there may have been a more 

“out of sight, out of mind” attitude in terms of their retirement benefits. It should be 

made very clear when these statements are given that these are just projections that are 

subject to change since they are for defined contribution plans that have no guarantee of 

set income. Again, despite the lack of permanence of the information given in the 

statements, it would still be very beneficial because it would open the eyes of 

employees to the prospect of their retirement and allow them to be proactive about their 

retirement early on. 

C. Broaden options offered under defined contribution plans

A lot of the risks and downfalls that are present in defined contribution 

plans could be fixed if the DC plans were opened up some more to provide more 

options to retirees. For example, a lot of defined contribution plans do not allow 

employees the option to contribute to the plan. This trend seems to be mostly in small 

businesses, the demographic which is the most at risk in regards to having adequate 

retirement savings. It has been reported that a majority of employers are not 

contributing to their pension plans simply because their employer does not offer the 

option to do so. The risk of not having adequate retirement coverage from a DC plan, 

can be somewhat alleviated if employers were required under defined contribution plans 

to give the option of employee contribution. This way, the employees have a greater 

cushion for benefits since they too are contributing to the plan, along with the employer. 
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 In addition, the defined contribution plans should be flexible enough so that 

employers can roll over their funds from job to job. With the way the economy is 

presently, where unemployment is at its highest, it is very common for individuals to be 

entering into new jobs. Unfortunately, the transition of their pension benefits from their 

old place of work to their new place of work is not clear cut, and retirement funds are 

often lost in the transition process. If defined contribution plans were made more 

uniform, so that workers were allowed to easily roll over their benefits from one plan to 

another without losing funds, they would be in a better position in terms of saving funds 

for their retirement. Additionally, there should be a cap or limit on the fee amount a DC 

plan can charge. Many plans charge high annual fees which substantially reduces the 

amount one accumulates in his pension. If a cap or limit were to be uniformly placed 

on all defined contribution plans to charge only a nominal annual fee, then individuals 

would be saving a substantial portion of their benefits. 

 Finally, defined contribution plans should be required to allow the option for 

both lump sum and annuity pay outs. Since some defined contribution plans already 

offer that option, it should be made an option for every plan. In fact, defined 

contribution plans can make the default payment option be lifetime annuities, where 

individuals would have to specially request a lump sum payment if that is the option 

they would like. Making life time annuity payments the default under defined

contribution plans would provide security and an extra cushion for those individuals 

that may not be knowledgeable enough to decide an appropriate retirement payment 

option, or care enough. At the same time, though, it would still allow individuals to 

have the option if they choose to switch to a lump sum payment, so that they are not 

forced to have life time annuities only. 

Along with the option of having either a life time annuity or lump sum payout, it 

is important that adequate information about what each option would mean should 

accompany each option. If after the fact an employee still chooses a lump sum pay out 

over an annuity, they should be given adequate information on how to properly save 

their money and properly spend it so they do not run the risk of outliving their benefits. 

Offering the option of lifetime annuity under defined contribution plans has led to 

opposition on the grounds that offering the life time annuities significantly increases 

administrative costs. If defined contribution plan sponsors were given certain tax 

breaks for offering the life time annuity option, then the breaks they would receive in 

tax can compensate for any administrative costs borne for offering such an option. 

D. Tax Incentives for Lifetime Annuities

Instead of forcing all individuals to receive their retirement payouts in the

form of lifetime annuities, the Internal Revenue Service should provide certain tax 

incentives to individuals to choose a life time annuity payout over a lump sum. For 

example, legislation has been proposed to allow an exclusion from gross income up to a 

certain amount, for payments received from defined benefit plans which otherwise are 

considered guaranteed income for tax purposes. Having a tax break like that would 
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encourage individuals to opt into plans that offer lifetime annuities, and might defer 

their choice into defined contribution plans like 401Ks. 

E. Utilizing technology to disburse information 

Plan providers and employers can better output information about one’s 

retirement status, including amount accrued and estimations of future earnings, by 

utilizing the ever growing technology sources of our day and age. With the creation of 

such mobile devices as the IPhone, one can do virtually anything through the use of 

their mobile phone. The IPhone device specifically creates various applications which 

range from downloading music to checking your stock portfolios. Therefore, the 

Department of Labor should create its own retirement calculating application that can 

be utilized on such devices as the IPhone. The purpose of this application would be to 

allow individuals to constantly calculate and keep track of the amount of earnings they 

have accrued in their retirement plan. Taking advantage of this type of technology 

would encourage individuals to be proactive in assessing the status of their retirement 

plans, because being able to check their status would be so convenient. In our day and 

age when most cannot function without a cellular phone in hand, it would be extremely 

efficient for one to be able to keep track of their retirement benefits with a simple click 

of a button. 

 In addition, employers and plan providers should take advantage of other 

popular technology resources, such as email or text messaging to relay important 

information to plan participants. Email has become one of the number one sources of 

communication between individuals. Email, however, has taken another leap in 

communication where now it has become a source of communication for various other 

reasons besides communicating with other individuals. For example, banks and credit 

card companies, in a move to “go green”, have shifted over to a paperless system, which 

means individuals are no longer receiving paper statements of their accounts and 

various other information by paper through the mail. Now banks and credit card 

companies have resorted to sending their statements out via email. Employers and plan 

providers, should likewise utilize email to provide frequented status updates of an 

individual’s retirement account. In addition other information, like the pros and cons of 

each type of plan, or changes in the plans themselves, should also be sent over email to 

beneficiaries. The advantages of doing so, is that it could reduce many of the 

administrative costs employers would faced by providing hard copy statements, as well 

as the information can be transmitted almost instantly to an individual. Text messaging, 

can also be utilized in this manner. Although providing full information and statements 

via text message may not be practical, text messaging would be useful in providing 

individuals, who opt for it, to receive text alerts that a new statement of their pension 

plan is available, or that there has been changes to their plan. Once they receive this 

alert they can immediately look into the changes.
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IV. Conclusion 

The Department of Labor should not look into making regulation that would 

force all pension plans to be annuitized. Doing so would mean that this agency, and not 

the individuals would have a say in how their retirement benefits are accrued and paid 

out to them when they retire. Choosing what retirement plan best suits and individual 

and how they will receive their payouts upon retirement, should be a choice left to the 

individual themselves. This agency, through such regulation as providing blanket 

lifetime annuities to all individuals, is looking to increase one’s retirement security, and 

lessen the risks that one will outlive their retirement income. The risk that one will 

outlive their retirement income, however, can be reduced and prevented without this 

agency having to regulate lifetime annuities. 

If individuals are better informed of their pension plans, and the risks and 

benefits of each type of plan, they will weigh the risks according to their own lifestyles 

and pick the proper retirement plan for them. An employee’s workplace needs to be the 

main source of this information. Employers should set up mandatory informational and 

workshops that convey this information to the employees. Additionally, ERISA should 

be amended to require employers to provide full disclosure of this type of information 

automatically without the need of an employee request. Providing for more 

transparency and disclosure of the pension plans might increase the administrative costs 

for implementing such a change, however, those costs would be nominal in comparison 

to the benefit that would be received by retirees.

Additionally, if the Department of Labor is so concerned about the increased 

participation in defined contribution plans, leading to less retirement security, they 

should require the broadening of the options currently under the defined contribution 

plans, so that they become more secure. Since most defined contribution plans 

currently offer only lump sum payouts upon retirement, there should be a change that 

requires defined contribution plans to offer both an option for lump sum payouts as well 

as lifetime annuities. 

Finally, the there needs to be a greater utilization of today’s technology to get 

crucial information about one’s plans out the individual. The Department of Labor 

should create an IPhone application that can display and calculate one’s accrued funds 

under their pension plan. Employers and plan administrators should also divulge 

information about individual’s retirement plans via email, with update alerts via text 

message. If the Department of Labor follows these suggestions, there will be no need to 

regulate retirement plans by forcing lifetime income options on individuals. Individuals 

will be better informed of the risks of running out of money upon retirement, and off 

this greater knowledge can make the appropriate decisions for their retirement life.