Washington Perspective, June 2007

DOL may consider stable value funds for default investment ruling

Despite a February deadline established by the Pension Protection Act of 2006, the Department of Labor has still not issued a final rule on default investment options for private (ERISA) retirement plans. DOL is reportedly reviewing other options that could include stable value funds.[more on the Department of Labor and Retirement plan defaults]

Treasury reverses on tax exclusions for self-funded plans

In an about-face, the Treasury Dept. says it now supports extending tax advantages to self-funded health, long-term care and accident plans. The switch comes as Congress makes technical corrections to PPA that will add the plans to the exclusion. [more on the the Treasury decision]

Focus on fees will likely lead to new laws and regs in 2007

A new focus on what plan sponsors charge in fees, and how they are disclosed to investors, will likely lead to what could be significant legislative and regulatory change before the end of 2007. SEC is also proposing a two-page plain-language alternative to the traditional prospectus that discloses a fund's investment objectives, risks, strategies and costs.[more on the focus on fees]

Social Security benefits remain major elderly income source

National Academy of Social insurance study finds Social Security benefits are the primary source of income for majority of retirees. Almost 90 percent of seniors are receiving half or more of their income from Social Security benefits. Predictions are that SS benefits will replace even less pre-retirement income.[more on the importance of Social Security benefits]