Compliance January 28, 2013

DOL Requests Input on Benefit Statement Surveys

The Department of Labor (DOL) is soliciting comments about a proposed information collection request to guide rulemaking about retirement benefit statements.
Reported by

The Department of Labor is planning to survey participants in an existing household Internet panel called the American Life Panel (ALP) and conduct four focus groups consisting of nonpanel members to explore whether information presented in retirement plan benefit statements can be presented in a manner that is understandable for participants and beneficiaries and that makes its audience better prepared for retirement.

The study results will be used to support the Department’s rule-making pursuant to section 105(a) of the Employee Retirement Income Security Act of 1974 (ERISA) as amended by the Pension Protection Act of 2006, which requires administrators of ERISA-covered individual account plans to furnish periodic benefit statements to participants and beneficiaries and requires the department to develop model benefits statements.  

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The department wants comments about whether the collections of information will have practical utility; the validity of the methodology and assumptions used; how to enhance the quality, utility and clarity of the information to be collected; and how to minimize the burden of the collection of information for those who are to respond.  

More information is here.

Data & Research January 28, 2013

Canadian Preretirees Lack Retirement Confidence

 

Just as in the U.S., many of our northern neighbors lack confidence in a secure retirement.

 

 

Reported by

Twenty-four percent of Canadian preretirees (working, ages 50 to 65 with at least $50,000 in investible assets) are not confident that they will be able to live comfortably in retirement, and about half of Canadian preretirees expect to have a lower standard of living compared with their existing lifestyle, according to a new study by LIMRA.

This is similar to LIMRA research of preretirees in the U.S., which found that less than half of preretirees (ages 55 to 70 and not retired) felt confident they will be able to live their desired lifestyle in retirement. 

The current study found that while seven in 10 preretirees in Canada have a dollar amount in mind that they will need to have saved or invested to ensure living comfortably in retirement, few (7%) have formal written plans. In addition, one quarter of preretirees have never saved regularly for retirement, and one-quarter remain uncertain when they can retire.

According to the survey, the majority of preretirees in Canada have neither estimated the amount of guaranteed income they will need in retirement nor the income they will receive in retirement.

“Without a clear understanding of their expenses in retirement or the income they can expect to receive, preretirees will not be able to develop a credible retirement plan and ensure a secure financial future,” said Sally Bryck, associate research director, LIMRA Retirement Research. She added that financial advisers can play an important role in helping preretirees as they prepare for retirement.

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