Believes that participants should have the opportunity to learn about all the features of their plan, including vesting rules and distribution options
Prudential Financial has urged the US government to overhaul pension plan regulations to ensure that the participants disclosures are relevant, succinct and timely. Reportedly, the US Department of Labor’s ERISA Advisory Council, which is charged with making policy recommendations to the Secretary of Labor on retirement security issues, heard testimony from industry experts, including Prudential’s executives.
Michelle Morey, vice president of participant Communications for Prudential Retirement, a business unit of Prudential Financial, testified before the council along with colleagues, Michael Taricani, vice president of regulatory and consulting services, and Dan Fontaine, project management director.
Prudential believes that participants should have the opportunity to learn about all the features of their plan – including vesting rules and distribution options – helping improve their financial literacy. Requiring these details to be included in any notice, however, makes the notice longer and dilutes the notice’s key message, which often leads to participant confusion.
Mr. Morey said: “We strongly urge active and coordinated pursuit of any actions needed to bring about improvements to required participant notices and general retirement literacy. In our testimony we outlined a comprehensive plan that would help plan sponsors combat current challenges they face meeting notice requirements. If enacted, plan sponsors would see reduced costs that would improve plan efficiency and performance.”
Mr. Taricani said: “The current disclosure notice process provides the potential for better-informed participants but there is substantial room for improvement. Participants will only be better-informed if they read a notice and understand it. Notices need to be relevant, brief and delivered in a timely, effective manner – which will encourage participants to read them and in turn, become more knowledgeable.”