Hewitt Associates LLC 

100 Half Day Road 

Lincolnshire, IL 60069 

Tel 847.295.5000 Fax 847.295.7634 

www.hewitt.com 

August 13, 2010 

Submitted electronically via email to ORI@dol.gov 

Office of Regulations and Interpretations 

Employee Benefits Security Administration 

Attn: Lifetime Income Joint Hearing, Room N-5655 

U.S. Department of Labor 

200 Constitution Avenue N.W. 

Washington, DC 20210 

Dear Sir or Madam: 

Re: Lifetime Income Joint Hearing 

Hewitt Associates (Hewitt) welcomes the opportunity to provide comments to the Department of Labor (the 

Department) and Internal Revenue Service (IRS) at the joint hearing on September 14, and if necessary, 

September 15, 2010, on the topic of a lifetime stream of income after retirement for participants and 

beneficiaries in retirement plans. The departments request for information (RFI) was published in the 

Federal Register on February 2, 2010. Hewitt submitted comments related to the RFI on income options 

and would now like to address some of the issues we raised in our letter at the hearing. 

Who We Are 

Hewitt Associates is a global human resources outsourcing and consulting company providing services to 

major employers in more than 30 countries. We employ 23,000 associates worldwide. Headquartered in 

Lincolnshire, Illinois, we serve more than 2,000 U.S. employers from offices in 30 states. 

As one of the world’s premier human resources services companies, Hewitt Associates has extensive 

experience in both designing and administering 401(k) plans for mid- to large-sized employers, including 

helping employers to communicate with their participants about this increasingly important benefit. We 

are the largest independent provider of administration services for retirement plans, serving more than 

11 million plan participants. We do not manage funds and we have no affiliations with any investment 

management firms. 

 

Issues for Hewitt Testimony

The two topics we wish to address at the hearing are: 

1. Certain Specific Participant Concerns Affecting the Choice of Lifetime Income Relative to Other 

Options. (5 minutes) 

We would like to discuss the importance of fee transparency and institutional pricing to the adoption of 

lifetime income options by plan participants. 

First, fee transparency is important for the following reasons: 

• Despite the stock market’s recovery, Americans are still struggling to recoup the historic losses 

sustained in their 401(k) plans over the past two years. One obstacle is excessive 401(k) plan fees, 
Attention: Lifetime Income Joint Hearing 

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August 13, 2010 

which may be robbing participants of thousands of hard-earned dollars over the course of their 

career. Fee transparency will provide participants with the confidence needed to make informed, 

educated choices about distribution options. 

• From a plan fiduciary’s perspective, fee transparency is necessary because it enables the fiduciary 

to make informed decisions on whether to add lifetime income options to their defined contribution 

plan, which options to add, and which provider(s) to select. Without a fiduciary’s blessing, plan 

participants will not have the opportunity to access lifetime income options from their plans. 

• Finally, fee transparency will facilitate competition among providers of such lifetime income options, 

keeping costs down for plans and plan participants. 

Second, we propose that we discuss the importance of institutional pricing to the success of retirement 

income options. Millions of plan participants have access to a 401(k) plan with significant assets. Because 

of the scale afforded such plans, participants benefit from significantly reduced pricing of investments, 

administration, and other plan services, which directly impacts the account balances of participants. Hewitt 

recommends encouraging adoption of lifetime income options through institutional plans to provide similar 

pricing leverage to make these options more affordable and attractive for plan participants. 

2. Alternative Designs of In-Plan and Distribution Lifetime Income Options. (5 minutes) 

We would like to address the need for flexibility and innovation with respect to designs allowed and 

encouraged within qualified retirement plans. 

Most defined contribution plans today fail to provide participants with the necessary tools to effectively 

manage postretirement risks, forcing them to look toward external, retail-focused options. Our research 

shows that when traditional features such as immediate rollover annuities are made available, few 

participants take advantage of them, suggesting that new solutions or strategies are needed in order for 

retirees to meet the challenges and risks faced in today’s environment. 

We urge the DOL and IRS to encourage flexibility and to support innovative solutions—including insurance 

solutions, asset management and managed payout solutions, and participant education and guidance—so 

that plan sponsors can offer the tools and features that are best suited for their own unique participant 

populations.

Conclusion 

Hewitt commends the Agencies for their ongoing efforts to help Americans achieve income adequacy in 

retirement. Plan sponsors have a unique opportunity to influence the decisions of millions of Americans 

when it comes to lifetime income options. Additionally, they can leverage their size, scale, and fiduciary 

prudence to deliver cost-effective solutions designed with the participants’ best interests in mind. We would 

appreciate the opportunity to present our comments and recommendations directly to the Agencies. If you 

have any questions or comments, please contact the undersigned at the telephone number or email 

address provided below. 
Attention: Lifetime Income Joint Hearing 

Page 3 

August 13, 2010 

Sincerely, 

Hewitt Associates LLC 

Dan Campbell 

Defined Contribution Administration Practice Leader 

(847) 295-5000 

dan.campbell@hewitt.com