Bill Overview
Title: Pension Risk Transfer Accountability Act of 2021
Description: This bill requires the Department of Labor to (1) review the fiduciary standards that apply to the selection of an annuity provider for certain defined benefit pension plans, and (2) assess any risk to plan participants from such standards.
Sponsors: Sen. Murphy, Christopher [D-CT]
Target Audience
Population: People who are participants in defined benefit pension plans
Estimated Size: 40000000
- The bill focuses on defined benefit pension plans, indicating its relevance to employees and retirees who are participants in such plans.
- Defined benefit pension plans are managed by various employers, including private companies, public entities, and unions, together with insurance companies that act as annuity providers.
- Participants of these pension plans often include retirees and employees who are reliant on the annuity provider's financial health and integrity for their retirement income.
- Given the nature of pension plans, they cater to various age demographics, primarily middle-aged to older adults closer to retirement.
Reasoning
- The target population for this policy includes people who are participants in defined benefit pension plans, such as public employees and those working for large corporations offering such plans.
- The policy budget indicates a limited ability to affect the entire population significantly, focusing on regulatory adjustments and oversight rather than direct financial transfers to individuals.
- Wellbeing is expected to be influenced by the perceived security of retirement plans as the policy aims to review the fiduciary standards and mitigate risks associated with pension management.
- The diverse demographics within the target population include middle-aged to older adults nearing or in retirement, thus representing varying levels of dependency on pension plans.
- Given that the policy includes review and not direct intervention, its impact might vary from high among those worried about pension security to low where plans are well-managed.
Simulated Interviews
Retired school teacher (Florida)
Age: 68 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 10/20
Statement of Opinion:
- I'm hopeful this policy ensures my pension is secure, as I rely on it for my monthly expenses.
- With government oversight, there may be more trust in the annuity providers.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 8 | 5 |
| Year 20 | 7 | 4 |
Aerospace engineer (California)
Age: 58 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 12/20
Statement of Opinion:
- I'm concerned about the sustainability of my pension plan, so any increase in oversight is welcome.
- If they find issues, it might affect me before I retire.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 7 | 6 |
| Year 20 | 6 | 5 |
Public sector worker (New York)
Age: 45 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 8.0 years
Commonness: 8/20
Statement of Opinion:
- I feel cautious but optimistic with oversight increasing, though it might not impact my day-to-day immediately.
- I want to trust that my pension will be there when I retire.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 9 | 7 |
| Year 10 | 8 | 6 |
| Year 20 | 7 | 5 |
Retired manufacturing worker (Texas)
Age: 72 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 20.0 years
Commonness: 9/20
Statement of Opinion:
- I support any action that will protect my pension from future company bankruptcies or mismanagement.
- The policy might not increase my income but provide peace of mind.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 7 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 8 | 5 |
| Year 10 | 8 | 4 |
| Year 20 | 7 | 3 |
Bank manager (Ohio)
Age: 60 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 3.0 years
Commonness: 7/20
Statement of Opinion:
- Having a policy that reviews standards provides me a sense of security before I retire.
- Though changes might not be immediate, it's good to know checks are happening.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 9 | 8 |
| Year 5 | 9 | 8 |
| Year 10 | 7 | 6 |
| Year 20 | 6 | 5 |
Retired city planner (Illinois)
Age: 66 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 12.0 years
Commonness: 11/20
Statement of Opinion:
- I'm relieved about the possibility of increased standards and oversight, which could prevent potential issues.
- This gives my family reassurances about my pension's consistency.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 7 | 5 |
| Year 20 | 6 | 4 |
Union representative (Pennsylvania)
Age: 49 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 7.0 years
Commonness: 6/20
Statement of Opinion:
- This policy aligns with what we have been pushing for, which is more accountability and transparent management of pension funds.
- While it doesn't solve everything, it's a step forward.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 9 | 7 |
| Year 10 | 7 | 6 |
| Year 20 | 6 | 5 |
Auto industry worker (Michigan)
Age: 63 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 15.0 years
Commonness: 10/20
Statement of Opinion:
- I want assurance that my pension won't disappear after I retire; knowing the providers are scrutinized is comforting.
- It's important for peace of mind, especially when nearing retirement.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 8 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 9 | 6 |
| Year 10 | 8 | 5 |
| Year 20 | 7 | 4 |
Non-profit director (Georgia)
Age: 52 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 10.0 years
Commonness: 4/20
Statement of Opinion:
- With this policy in place, there's an added layer of protection for our pensions, which is reassuring.
- We need more actions like this to ensure pension plans are reliable.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 9 | 8 |
| Year 5 | 9 | 8 |
| Year 10 | 8 | 7 |
| Year 20 | 7 | 6 |
IT specialist (Washington)
Age: 55 | Gender: other
Wellbeing Before Policy: 8
Duration of Impact: 4.0 years
Commonness: 5/20
Statement of Opinion:
- Policy vigilance is good for everyone with a pension; it keeps the system honest.
- I expect consistency in payments, so any safeguard is a good measure.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 9 | 8 |
| Year 3 | 9 | 8 |
| Year 5 | 9 | 8 |
| Year 10 | 7 | 7 |
| Year 20 | 6 | 5 |
Cost Estimates
Year 1: $15000000 (Low: $10000000, High: $20000000)
Year 2: $15000000 (Low: $10000000, High: $20000000)
Year 3: $15000000 (Low: $10000000, High: $20000000)
Year 5: $0 (Low: $0, High: $0)
Year 10: $0 (Low: $0, High: $0)
Year 100: $0 (Low: $0, High: $0)
Key Considerations
- The primary cost drivers are related to staffing and operational expenses for the Department of Labor's review activities.
- Potential intangible benefits include improved financial security for retirees, which are not quantified directly in fiscal terms.
- Duration is limited to the time frame needed for comprehensive review and any consequent regulatory update.