DOL Rule to Fatten Pensioners' Wallets
U.S. Secretary of Labor Elaine L. Chao yesterday unveiled a final rule establishing qualified default investment alternatives, making it easier for employers to automatically enroll workers in their 401(k) and other defined-contribution plans. The final rule, which resulted from the Pension Protection Act , is projected to increase retirement savings in 401(k)-type plans by as much as $134 billion by 2034.
"This is a key component of the Pension Protection Act and will help many more workers and their families build a nest egg for a secure and comfortable retirement," Chao said.
The regulation implements PPA provisions providing relief to plan fiduciaries who invest the assets of participants who do not provide investment direction (such as automatically enrolled workers) in "qualified default investment alternatives" or QDIAs. QDIAs described in the rule will encourage the investment of employee assets in investment vehicles appropriate for long-term retirement savings.
A fact sheet detailing the final regulation can be found at www.dol.gov/ebsa. The final rule can be viewed in today's Federal Register.