1

Response to Request for Comments on Proposed Amendments to 

the Qualified Default Investment Alternative and the ParticipantLevel Disclosure Regulations 

January 14, 2011 

Employee Benefits Security Administration 

Department of Labor 

29 CFR Part 2510 

RIN 1210-AB38 

The American Society of Pension Professionals and Actuaries (ASPPA) and the National 

Association of Independent Retirement Plan Advisors (NAIRPA) appreciate the opportunity 

to comment on proposed amendments to the qualified default investment alternative and the 

participant-level disclosure regulations (the “Proposed Regulations”).1

ASPPA is a national organization of more than 7,500 retirement plan professionals who 

provide consulting and administrative services for qualified retirement plans covering 

millions of American workers. ASPPA members are retirement professionals of all disciplines 

including consultants, administrators, actuaries, accountants, and attorneys. ASPPA is 

particularly focused on the issues faced by small- to medium-sized employers. ASPPA 

membership is diverse and united by a common dedication to the private retirement plan 

system. 

NAIRPA is a national organization of firms which provide independent investment advice to 

retirement plans and participants. NAIRPA’s members are registered investment advisors 

whose fees for investment advisory services do not vary with the investment options selected 

by the plan or participants. In addition, NAIRPA members commit to disclosing expected fees 

in advance of an engagement, reporting fees annually thereafter, and agreeing to serve as a 

plan fiduciary with respect to all plans for which a member serves as a retirement plan 

advisor. 

ASPPA and NAIRPA applaud the Department of Labor (“Department”) for its efforts in the 

Proposed Regulations. Many of the requirements proposed by the Department were suggested 

by NAIRPA in its comment letter to the Securities and Exchange Commission (“SEC”) on 

September 1, 2010.2

 For example, NAIRPA had suggested that disclosures be provided about 

target date funds’ glidepath ranges, when the glidepath becomes most conservative, the 

 

1

 75 Fed. Reg. 73987 (Nov. 30, 2010). 

2

 A copy of NAIRPA’s letter to the SEC is available at http://prod-pres.asppa.org/documentvault/pdfs/nairpa/tdfcomments.aspx. 
2

assumed participant retirement age that is being used, and whether the fund is using a “to” 

versus a “through” approach. 

However, ASPPA and NAIRPA request that the Department clarify the requirement in the 

Proposed Regulations that a chart, table or other graphical representation not “obscure or 

impede” a participant’s or beneficiary’s understanding of information required to be 

explained.3 Given the ambiguity in the language in the Proposed Regulation, plan fiduciaries 

will have difficulty determining whether they have satisfied this requirement. As a result, 

ASPPA and NAIRPA suggest that the Department adopt the standard for target date fund 

disclosures that is used in the context of summary plan descriptions, i.e., where information 

must be provided “in a manner calculated to be understood by the average plan participant”.4

Additionally, ASPPA and NAIRPA encourage the Department to provide additional 

disclosures to participants to help them select the appropriate target date fund. We suggest 

that the disclosures for participants include: 

• The impact on 401(k) participants who take a lump sum cash distribution at 

retirement. In our experience, most participants take their distributions in cash lump 

sums at retirement. Even if they roll their distributions over to an IRA, they may not 

reinvest (or be able to reinvest) in the same target date funds. Thus, any fund in which 

the landing point is 20 years after retirement may be wholly inappropriate for that 

participant. Our point is not to engage in a debate of the “to” versus “through” 

glidepaths, but to emphasize that disclosure of asset allocation at the target date and/or 

the landing point, while helpful, may not be sufficient. 

• A statement as to the potential impact of disparate ages between spouses. A target date 

fund for a participant who intends to retire at age 70 (with a life expectancy of 16 

years) and a spouse that is age 68 (with a life expectancy of 22 years) may not be 

appropriate for a 70 year-old with a 55 year-old spouse (whose life expectancy may be 

35 years). 

These comments were primarily authored by Debra A. Davis, APM. We welcome the 

opportunity to discuss these issues with you. If you have any questions regarding the matters 

discussed herein, please contact Brian Graff at (703) 516-9300. 

Thank you for your time and consideration. 

Sincerely, 

 

 

3

 DOL Prop. Reg. §§ 2550.404a-5(i)(4)(i); 2550.404c-5(d)(3)(vi)(A) (stating “An explanation of the asset 

allocation, how the asset allocation will change over time, and the point in time when the qualified default 

investment alternative will reach its most conservative asset allocation; including a chart, table, or other 

graphical representation that illustrates such change in asset allocation over time and that does not obscure or 

impede a participant’s or beneficiary’s understanding of the information explained pursuant to this paragraph 

(d)(3)(vi)(A)...”). 75 Fed. Reg. at 73994 - 95. 

4

 ERISA § 102(a). 
3

/s/ 

Brian H. Graff, Esq., APM 

Executive Director/CEO 

/s/ 

Judy A. Miller, MSPA 

Chief of Actuarial Issues 

/s/ 

Craig P. Hoffman, Esq., APM 

General Counsel 

/s/ 

Mark Dunbar, MSPA, Co-Chair 

Gov’t Affairs Committee 

/s/ 

Ilene H. Ferenczy, Esq., APM, Co-Chair 

Gov’t Affairs Committee 

/s/ 

James Paul, APM, Co-Chair 

Gov’t Affairs Committee