If you haven't had a chance to see the recent PBC special, ‘Frontline, The Retirement
Gamble’, it is worth watching. It's a little scary in its depiction of the retirement industry.
It’s gotten a lot of industry attention. I suggest you take a look, if
you get a moment. Linked here.
After watching it, please think about this excerpt from Phyllis Borzi,
assistant secretary of labor in charge of EBSA (DOL enforcement). Look at
the choice of words she uses highlighted below in yellow. Not new
rhetoric, but definitely louder now than ever. You can sign up for the
DOL newsletter at DOL.GOV.
Take Three:
Fresh From 'Frontline,' Borzi on Retirement
Phyllis
C. Borzi is the assistant secretary of labor in charge of the Employee Benefits
Security Administration, which helps protect the retirement security of
millions of America's workers. This week, she appeared in the PBS Frontline
documentary, "The Retirement Gamble." We asked her three questions
about retirement security in America today.
Frontline says that there's a retirement crisis. Is this
true? I
think the Frontline episode was right to point out that there are significant
challenges that workers face in saving for retirement. We used to have a system
of predominantly traditional pension plans, which are professionally managed
and invested, and funded by employers. Now it is a defined contribution system,
which requires workers to take on more responsibility not only to make sure
that they save enough, but also to invest the right way. Part of our job at
EBSA is to make sure workers are getting the information that they need, such
as information on the fees that they are paying, so that those challenges
aren't insurmountable.
What can the average person do to help ensure a secure
retirement? There
are a lot of steps you can take. First, make sure you are saving now, no matter
where you are in your career, and maximize your employer match if you have one.
Also, pay attention to the fees you're being charged and make sure you read all
of the communications that you receive from your plan. If you have an investment adviser, make sure
you're asking them questions to ensure that the person is a "fiduciary,"
that is, somebody legally required to put your financial interests ahead of
their own. We've developed a fact sheet to help you do just that.
Can you tell us more about what the Department of Labor
is doing to help? One of
the challenges that Frontline identified was that investment advisers and
brokers may be encouraging you to invest in products that financially benefit
them — and may not be the best option for you. We don't think they should be
able to do that, so we're working on a proposed rule to address these conflicts
of interest and make sure that when you get advice, it's in your best interest,
not your adviser's.
• Read the Fiduciary Fact Sheet
• Read the EBSA Newsletter
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