Congress Urged to Allow Employers the Flexibility to Design Retirement Plans "We Haven't Begun to Co

Employee Relations

This week, HR Policy member Dennis Delaney, Executive VP, HR and Administration, of Ingram Industries, urged a key House Subcommittee to work with plan sponsors to enact legislation that will further encourage participation in the employer-provided system and “keep them in the game.”  In testimony before the House Education and the Workforce Subcommittee on Health, Education, Labor and Pensions, Mr. Delaney discussed how “[o]ne of the greatest impediments to the employer-provided system today is the lack of predictability of the rules and regulatory flexibility to adapt to changing situations.”  To illustrate, he noted how changes in the funding rules under the Pension Protection Act of 2006, followed by the market downturn in 2008, created an “unacceptably unpredictable” situation that prompted the company to freeze its defined benefit plan at the end of 2010.  Meanwhile, he noted that many employers that have frozen or terminated their defined benefit plans are adding features to the defined contribution plans that create a "'defined benefit-like' retirement plan for associates."  He emphasized the importance of ensuring flexibility because, for employers, “demographic and competitive needs will spur the creation of plan designs that we have not even begun to contemplate.”