Advocacy Group Calls New Labor Department Rule ‘Anti-Consumer’

The Pension Rights Center (PRC), a pension advocacy group, has called a new Department of Labor (DOL) disclosure rule “anti-consumer,” saying it will adversely affect people’s ability to plan for retirement and prove their entitlement to benefits. The new rule allows retirement plans to send individuals a notice by text or email telling them that key information about their plan is available on a website, rather than having to send the information directly to the participants.

The rule allows plan administrators who satisfy specified conditions to provide participants and beneficiaries with a notice that certain disclosures will be made available on a website, or to furnish disclosures via email. However, anyone who prefers to receive paper disclosures can opt out of electronic delivery entirely.

“The department expects the rule to enhance the effectiveness of ERISA [Employee Retirement Income Security Act] disclosures and significantly reduce the costs and burden associated with furnishing many of the recurring and most costly disclosures,” said the DOL’s Employee Benefits Security Administration in a summary of the rule.

“In addition to benefiting workers, this rule will immediately assist employers and the retirement plan industry as they face a number of economic challenges due to the COVID-19 emergency, including logistical and other impediments to compliance with ERISA’s disclosure requirements.”

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But the PRC is urging plan participants to reject the paperless option and tell their pension and 401(k) administrators that they want to continue receiving a hard copy of their retirement information, and not a text or email telling them where they can find the information online.

The advocacy group warned that the new rule change doesn’t take into consideration the “huge digital divide” in the country that is based on geography, education, income, race/ethnicity, and age.

“We are astonished that in the midst of an unprecedented health crisis and economic collapse that the Department of Labor would issue a regulation that will leave so many workers, retirees, and their spouses in the dark about their retirement plans and benefits,” Karen Friedman, executive vice president of the PRC, said in a statement.

Prior to the rule change, which took effect July 27, plans sent out information on paper through the mail, unless participants previously requested to go “paperless.” PRC said that although retirement plans are still allowed to operate under the old rule, in reality, most won’t stay with the old option. The group said notice-and-access is easier and cheaper for plans, and that “many workers and retirees will pay a steep price,” adding that “their chances of getting the information they are legally entitled to receive will be greatly diminished.”

The PRC also argues that the new rule contradicts the DOL’s own guidance. It said that because plans are not required to check if participants have logged into the website and read the retirement plan information, the rule goes against the Labor Department’s interpretation of federal pension law that requires plans to use information delivery methods that are “reasonably calculated to ensure actual receipt of the information by plan participants.”

The PRC also said the new rule “sidesteps” the Supreme Court’s recent decision in Intel Corporation Investment Policy Committee v. Christopher M. Sulyma, which ruled that a notice-and-access method of disclosure does not ensure employees and retirees have actual knowledge of retirement plan information on a website.

“At a time when people need information to protect themselves more than ever, this rule is like a cruel game of hide and seek,” said Friedman, “where workers and retirees are blindfolded and sent into an electronic abyss where they will have to fumble around searching for the information they will need to protect their future.”

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Tags: 401(k), Ask for Paper, Karen Friedman, Pension Rights Center, United States Department of Labor (DOL)

The Canadian ambassador and permanent representative to the United Nations has been chosen by the Caisse de dépôt et placement du Québec (CDPQ) to head CDPQ Global as part of the fund’s push to expand its international footprint.

As executive vice president and head of CDPQ Global, Marc-André Blanchard will oversee the fund’s regional offices in the United States and Latin America, Europe, and the Asia/Pacific starting in September, CDPQ said Friday.

Blanchard will report to CDPQ’s president and chief executive, Charles Emond, and also sit on the fund’s investment risk committee. Anita George, previously the head of growth markets, will support Blanchard as deputy head of CDPQ Global.

The Quebec pension fund said it is looking to take the “natural next step” in its evolution and expand its global portfolio, which it says has broadened by more than CA$140 billion in the past five years. In the past year, it increased its allocations to growth markets, part of a mandate the pension fund says has been profitable, generating annualized returns of 9.2% and adding CA$1.5 billion in value over the past five years. As of December, CDPQ is worth about CA$340 billion, or US$253.7 billion.

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“This new structure will allow us to continue diversifying our portfolio and go to market with a cross-functional and global view,” Emond said in a statement.

Blanchard, a lawyer and diplomat, comes to the Quebec pension fund with a wealth of experience navigating overseas relations. In 2016, the lawyer was appointed a permanent representative of Canada to the United Nations, where he took up sustainable development initiatives around climate change.

Prior to that, he was the chairman and chief executive for six years at McCarthy Tétrault, one of the largest law firms in Canada.