[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]




                 REGULATORY BARRIERS FACING WORKERS AND
                     FAMILIES SAVING FOR RETIREMENT

=======================================================================

                                HEARING

                               before the

                        SUBCOMMITTEE ON HEALTH,
                    EMPLOYMENT, LABOR, AND PENSIONS

                         COMMITTEE ON EDUCATION
                           AND THE WORKFORCE

                     U.S. House of Representatives

                     ONE HUNDRED FIFTEENTH CONGRESS

                             FIRST SESSION

                               __________

              HEARING HELD IN WASHINGTON, DC, MAY 18, 2017

                               __________

                           Serial No. 115-15

                               __________

  Printed for the use of the Committee on Education and the Workforce





[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]








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                COMMITTEE ON EDUCATION AND THE WORKFORCE

               VIRGINIA FOXX, North Carolina, Chairwoman

Joe Wilson, South Carolina           Robert C. ``Bobby'' Scott, 
Duncan Hunter, California                Virginia
David P. Roe, Tennessee              Ranking Member
Glenn ``GT'' Thompson, Pennsylvania  Susan A. Davis, California
Tim Walberg, Michigan                Raul M. Grijalva, Arizona
Brett Guthrie, Kentucky              Joe Courtney, Connecticut
Todd Rokita, Indiana                 Marcia L. Fudge, Ohio
Lou Barletta, Pennsylvania           Jared Polis, Colorado
Luke Messer, Indiana                 Gregorio Kilili Camacho Sablan,
Bradley Byrne, Alabama                 Northern Mariana Islands
David Brat, Virginia                 Frederica S. Wilson, Florida
Glenn Grothman, Wisconsin            Suzanne Bonamici, Oregon
Elise Stefanik, New York             Mark Takano, California
Rick W. Allen, Georgia               Alma S. Adams, North Carolina
Jason Lewis, Minnesota               Mark DeSaulnier, California
Francis Rooney, Florida              Donald Norcross, New Jersey
Paul Mitchell, Michigan              Lisa Blunt Rochester, Delaware
Tom Garrett, Jr., Virginia           Raja Krishnamoorthi, Illinois
Lloyd K. Smucker, Pennsylvania       Carol Shea-Porter, New Hampshire
A. Drew Ferguson, IV, Georgia        Adriano Espaillat, New York
Ron Estes, Kansas

                      Brandon Renz, Staff Director
                 Denise Forte, Minority Staff Director
                                 ------                                

        SUBCOMMITTEE ON HEALTH, EMPLOYMENT, LABOR, AND PENSIONS

                    TIM WALBERG, Michigan, Chairman

Joe Wilson, South Carolina           Gregorio Kilili Camacho Sablan,
David P. Roe, Tennessee                Northern Mariana Islands
Todd Rokita, Indiana                   Ranking Member
Lou Barletta, Pennsylvania           Frederica S. Wilson, Florida
Rick W. Allen, Georgia               Donald Norcross, New Jersey
Jason Lewis, Minnesota               Lisa Blunt Rochester, Delaware
Francis Rooney, Florida              Carol Shea-Porter, New Hampshire
Paul Mitchell, Michigan              Adriano Espaillat, New York
Lloyd K. Smucker, Pennsylvania       Joe Courtney, Connecticut
A. Drew Ferguson, IV, Georgia        Marcia L. Fudge, Ohio
Ron Estes, Kansas                    Suzanne Bonamici, Oregon 

















                            C O N T E N T S

                              ----------                              
                                                                   Page

Hearing held on May 18, 2017.....................................     1

Statement of Members:
    Sablan, Hon. Gregorio Kilili Camacho, Ranking Member, 
      Subcommittee on Health, Employment, Labor, and Pensions....     6
        Prepared statement of....................................     7
    Walberg, Hon. Tim, Chairman, Subcommittee on Health, 
      Employment, Labor, and Pensions............................     1
        Prepared statement of....................................     3

Statement of Witnesses:
    Campbell, Mr. Bradford P., Esq., Partner, Drinker Biddle and 
      Reath......................................................    67
        Prepared statement of....................................    69
    Furman, Mr. Jason, Senior Fellow, Peterson Institute for 
      International Economics....................................    56
        Prepared statement of....................................    58
    Kais, Mr. James, Senior Vice President and National 
      Retirement Practice Leader, Transamerica...................    32
        Prepared statement of....................................    35
    Sossa, Mr. Erik, Vice President, Global Benefits and 
      Wellness, PepsiCo, Inc.....................................    41
        Prepared statement of....................................    43

Additional Submissions:
    Roe, Hon. David P., a Representative in Congress from the 
      State of Tennessee:
        Letter dated May 18, 2017, from The SPARK Institute, Inc.    29
        Letter dated June 4, 2017, from The SPARK Institute, Inc.    31
    Chairman Walberg:
        Prepared statement of the American Council of Life 
          Insurers (ACLI)........................................     9
        Letter dated May 17, 2017, from Chamber of Commerce......    15
        Prepared statement of MetLife, Inc.......................    17
        Letter dated May 18, 2017, from Save Our Savings 
          Coalition..............................................    25
        Prepared statement of Sessions, Hon. Pete, a 
          Representative in Congress from the State of Texas.....    27

 
                   REGULATORY BARRIERS FACING WORKERS 
                   AND FAMILIES SAVING FOR RETIREMENT

                              ----------                              


                         Thursday, May 18, 2017

                        House of Representatives

               Committee on Education and the Workforce,

        Subcommittee on Health, Employment, Labor, and Pensions

                            Washington, D.C.

                              ----------                              

    The subcommittee met, pursuant to call, at 10:00 a.m., in 
Room 2175, Rayburn House Office Building, Hon. Tim Walberg 
[chairman of the subcommittee] presiding.
    Present: Representatives Walberg, Wilson of South Carolina, 
Roe, Allen, Lewis, Mitchell, Smucker, Ferguson, Estes, Sablan, 
Wilson of Florida, Norcross, Blunt Rochester, Espaillat, 
Courtney, Fudge, and Bonamici.
    Also Present: Representatives Foxx, Scott, and 
Krishnamoorthi.
    Staff Present: Bethany Aronhalt, Press Secretary; Andrew 
Banducci, Workforce Policy Counsel; Courtney Butcher, Director 
of Member Services and Coalitions; Ed Gilroy, Director of 
Workforce Policy; Jessica Goodman, Legislative Assistant; 
Callie Harman, Legislative Assistant; Nancy Locke, Chief Clerk; 
Dominique McKay, Deputy Press Secretary; James Mullen, Director 
of Information Technology; Krisann Pearce, General Counsel; 
Lauren Reddington, Deputy Press Secretary; Molly McLaughlin 
Salmi, Deputy Director of Workforce Policy; Olivia Voslow, 
Staff Assistant; Joseph Wheeler, Professional Staff Member; 
Tylease Alli, Minority Clerk/Intern and Fellow Coordinator; 
Denise Forte, Minority Staff Director; Christine Godinez, 
Minority Staff Assistant; Carolyn Hughes, Minority Director of 
Health Policy/Senior Labor Policy Advisor; Stephanie Lalle, 
Minority Press Assistant; Kevin McDermott, Minority Senior 
Labor Policy Advisor; Veronique Pluviose, Minority General 
Counsel; and Elizabeth Watson, Minority Director of Labor 
Policy.
    Chairman Walberg. A quorum being present, the Subcommittee 
on Health, Employment, Labor, and Pensions will come to order.
    Good morning. A delight to begin by welcoming our 
witnesses. Thanks for being here. We appreciate having a table 
full of witnesses that have some expertise it can share with us 
as opposed to just listening to ourselves.
    After decades of hard work, every American should be able 
to retire with dignity and peace of mind, but unfortunately, 
too many Americans are struggling to save for their retirement 
years. Now more than ever we need policies that empower workers 
to put money aside for retirement. These policies should 
include strong protections for workers.
    I was proud to champion a resolution to close a regulatory 
loophole that would have resulted in countless individuals 
losing their retirement protections they have long been 
afforded under Federal law. This loophole was put in place by 
the Obama administration to allow states to force workers into 
a government run IRA system.
    The answer to our nation's retirement challenges is not 
more government. Part of the answer is getting the economy to 
grow faster. The sluggish economic growth, weak job creation, 
and stagnant wages we have seen in recent years certainly have 
not made it easy for people to save for retirement.
    After all, the most important step toward a strong and 
secure retirement is a good paying job. Working families are 
also in desperate need of health care relief. With health 
insurance premiums increasing faster than wages, something has 
to give. For many individuals that means saving less for the 
future.
    That is why the committee has advanced free-market health 
care reforms that lower costs. We have also played an important 
role in delivering regulatory relief to help create jobs and 
grow the economy.
    I say all this because truly tackling the issue of 
retirement security is going to require a holistic approach. We 
can start by removing regulatory barriers facing retirement 
savers.
    For years, this committee has led the fight against the 
flawed fiduciary rule. According to one report, this rule was 
the most expensive regulatory action of 2016, and will impose 
more than $46 billion in costs on retirement savers. Let me 
repeat that, $46 billion. That is real money even around here.
    Now, we all agree that investment professionals should act 
in the best interests of their clients. In fact, this committee 
advanced bipartisan legislation increasing protections for 
retirement savers.
    However, the last thing working families need is to lose 
access to their trusted financial advisors. Unfortunately, that 
may be the case for low and middle-income families if the 
flawed fiduciary rule takes effect. Already, we are seeing the 
types of services those with fewer savings depend on begin to 
diminish.
    As this trend continues, many individuals will no longer be 
able to afford retirement advice. They will be left with robo-
advisors or forced to fend for themselves, and even worse, 
maybe to do nothing at all.
    It should come as no surprise that the robo-advice industry 
has come out in full force in defense of the fiduciary rule. An 
executive of one of the industry's largest firms recently told 
the press, and I quote, ``An expansion of the fiduciary rule 
would be nice for our business.'' Another robo-advisor said, 
and I quote again, ``They are sad that it looks like the rule 
might go away.'' There was even a national ad campaign urging 
the Trump administration to keep this flawed rule in place.
    We have nothing against robo-advisors, but people should 
have choices and access to retirement advice in all forms. 
However, many individuals prefer to choose personal financial 
advice, but as we have warned all along, that choice may soon 
be out of the reach for those who can no longer afford it.
    We have also warned of the impact on small businesses. Many 
rely on financial advisors as they set up retirement plans for 
their employees, but as one Indiana small business owner 
testified before the committee, this rule, and I quote, ``Puts 
all of that in jeopardy.''
    What we should be doing is making it easier for small 
businesses to offer retirement plans to their employees. 
According to a recent survey, 37 percent of small businesses 
cite ``set up expenses'' as the key reason for not offering 
retirement benefits. One way small businesses could provide 
retirement plans to workers at a more affordable cost is 
through multiple employer plans or MEPs.
    Unfortunately, these plans are currently restricted by the 
federal government. With roughly 58 million American small 
business employees, it is time to change that. We should 
empower small businesses to band together through MEPs, an idea 
that has received bipartisan support over the years.
    Additionally, we need to reduce red tape. We can file taxes 
online and students can receive information about their federal 
student loans online. Yet, the federal government limits the 
ability of workers and retirees to receive information about 
their retirement accounts in anything but a hard copy. Simply 
allowing employers to provide information about retirement 
benefits electronically would reduce the cost of administering 
retirement plans by an estimated 36 percent.
    All of the solutions I outlined have one thing in common. 
They would all empower workers and families to save more for 
retirement. Many in this room likely have other ideas as well, 
and that is exactly why we are here, to have a thoughtful 
dialogue on how we can strengthen retirement security for all 
Americans.
    I look forward to our discussion, and I will now yield to 
my friend, Ranking Member Sablan, for his opening remarks.
    [The statement of Mr. Walberg follows:]

   Prepared Statement of Hon. Tim Walberg, Chairman, Subcommittee on 
                 Health, Employment, Labor and Pensions

    Retirement security is a leading priority for this committee, and 
one that crosses party lines. After decades of hard work, every 
American should be able to retire with dignity and peace of mind. 
Unfortunately, too many Americans are struggling to save for their 
retirement years. Now more than ever, we need policies that empower 
workers to put money aside for retirement.
    Those policies should include strong protections for workers. I was 
proud to champion a resolution to close a regulatory loophole that 
would have resulted in countless individuals losing the retirement 
protections they have long been afforded under federal law. This 
loophole was put in place by the Obama administration to allow states 
to force workers into government-run IRAs.
    The answer to our nation's retirement challenges isn't more 
government. Part of the answer is getting the economy to grow faster. 
The sluggish economic growth, weak job creation, and stagnant wages 
we've seen in recent years certainly haven't made it easy for people to 
save for retirement. After all, the most important step toward a strong 
and secure retirement is a good-paying job.
    Working families are also in desperate need of health care relief. 
With health insurance premiums increasing faster than wages, something 
has to give. For many individuals, that means saving less for the 
future. That's why the committee has advanced free-market health care 
reforms that lower costs. We've also played an important role in 
delivering regulatory relief to help create jobs and grow the economy.
    I say all this because truly tackling the issue of retirement 
security is going to require a holistic approach. We can start by 
removing regulatory barriers facing retirement savers.
    For years, this committee has led the fight against the flawed 
fiduciary rule. According to one report, this rule was the most 
expensive regulatory action of 2016 and will impose more than $46 
billion in costs on retirement savers. Let me repeat that. $46 billion. 
Now, we all agree that investment professionals should act in the best 
interests of their clients. In fact, this committee advanced bipartisan 
legislation increasing protections for retirement savers.
    However, the last thing working families need is to lose access to 
their trusted financial advisors. Unfortunately, that may be the case 
for low- and middle-income families if the flawed fiduciary rule takes 
effect. Already, we are seeing the types of services those with fewer 
savings depend on begin to diminish. As this trend continues, many 
individuals will no longer be able to afford retirement advice. They'll 
be left with robo-advisors or forced to fend for themselves.
    It should come as no surprise that the robo-advice industry has 
come out in full force in defense of the fiduciary rule. An executive 
of one of the industry's largest firms recently told the press, ``An 
expansion of the fiduciary rule would be nice for our business.'' 
Another robo-adviser said they ``are sad that it looks like ... the 
rule might go away.'' There was even a national ad campaign urging the 
Trump administration to keep this flawed rule in place.
    We have nothing against robo-advisers. People should have choices 
and access to retirement advice in all forms. However, many individuals 
prefer to choose personal financial advice. But as we've warned all 
along, that choice may soon be out of reach for those who can no longer 
afford it.
    We've also warned of the impact on small businesses. Many rely on 
financial advisors as they set up retirement plans for their employees. 
But as one Indiana small business owner testified before the committee, 
this rule ``puts all of that in jeopardy.''
    What we should be doing is making it easier for small businesses to 
offer retirement plans to their employees. According to a recent 
survey, 37 percent of small businesses cite ``set up expenses'' as the 
key reason for not offering retirement benefits. One way small 
businesses could provide retirement plans to workers at a more 
affordable cost is through multiple employer plans, or MEPs.
    Unfortunately, these plans are currently restricted by the federal 
government. With roughly 58 million American small business employees, 
it's time to change that. We should empower small businesses to band 
together through MEPs--an idea that has received bipartisan support 
over the years.
    Additionally, we need to reduce red tape. We can file taxes online 
and students can receive information about their federal student loans 
online. Yet the federal government limits the ability of workers and 
retirees to receive information about their retirement accounts in 
anything but a hardcopy. Simply allowing employers to provide 
information about retirement benefits electronically would reduce the 
cost of administering retirement plans by an estimated 36 percent.
    All of the solutions I outlined have one thing in common. They 
would all empower workers and families to save more for retirement. 
Many in this room likely have other ideas as well, and that's exactly 
why we're here--to have a thoughtful dialogue on how we can strengthen 
retirement security for all Americans.
                                 ______
                                 
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
                                 
    Mr. Sablan. Thank you very much, Chairman Walberg, and good 
morning, everyone, and to our witnesses who have traveled here 
to join us this morning.
    Thank you, Chairman. I appreciate you convening today's 
hearing. We are in the midst of a retirement savings crisis. 
Tens of millions of Americans who work in the private sector 
lack access to a retirement savings plan at their jobs. This 
problem is particularly acute for people of color, as only 54 
percent of African American and Asian employees, and 38 percent 
of Latino employees work for an employer that sponsors a 
retirement plan.
    We know that many middle and low-income workers lack the 
resources to save for their own retirement, and that studies 
have shown that African American and Hispanic families are far 
behind white families in retirement savings, and that is deeply 
concerning.
    I look forward to today's discussion on how to ensure that 
everyone is planning and saving for retirement, and can get the 
investment advice that is in their best interests. I hope we 
can explore bipartisan ideas such as open MEPs aimed at 
incentivizing small businesses to offer retirement savings 
plans, and allowing those that do not to automatically enroll 
workers into the electronic delivery of disclosures and other 
retirement plan documents.
    Last Congress, I was a co-sponsor of H.R. 2656 authored by 
Dr. Roe and Congressman Polis, to allow for this kind of 
automatic enrollment of retirement plan communications.
    According to AARP, having access to a workplace retirement 
plan makes workers 15 times more likely to save, so we should 
be discussing ways to encourage or require employer sponsorship 
of retirement vehicles and automatic IRA legislation.
    We should also be examining ideas that address issues 
associated with job changes, rollovers, and default investments 
that could better maximize employees' returns. And recognizing 
that Social Security is the primary source of retirement 
income, we must work to preserve and modernize it, and consider 
the impact of taxation of benefits on their retirees.
    Mr. Chairman, I have to note that bipartisan ideas are 
unfortunately not the place from which we started this Congress 
or with the Trump administration. Instead, one of the first 
items of business was to nullify two Obama administration rules 
aimed at helping states and eligible municipalities to expand 
working people's access to retirement savings programs.
    For instance, California passed a law and established a 
program that is estimated to provide 6.8 million workers access 
to a retirement savings plan. In Illinois, more than one 
million people are expected to benefit from the state's 
retirement savings plan.
    These initiatives automatically enroll employees who are 
not offered a workplace savings plan and enable them to 
establish an IRA through a payroll deduction. State-based 
programs allow employees to opt out if they do not wish to 
participate, and fewer administrative burdens are imposed on 
employers.
    These rules were intended to ensure that these state 
initiatives did not run afoul of federal law. It is unfortunate 
that Congressional Republicans and the Trump administration 
worked together to nullify them.
    As our full committee Ranking Member Scott has said, the 
Congress should not be in the business of destabilizing efforts 
that increase workers' ability to save for retirement, and we 
should not go out of our way to undermine states' rights to 
implement their own innovative solutions. I strongly agree with 
that.
    Additionally, the House passed what is known as an age tax, 
which would force Americans age 50 to 64 to pay premiums five 
times higher than what others pay for coverage. AARP strongly 
opposes this provision, and estimates it would add an average 
of $3,200 annually to premiums for adults age 60 or older.
    I am concerned that if TrumpCare ever becomes law, just 
when Americans are at or approaching retirement age, they would 
be facing skyrocketing premiums and wondering if they will ever 
be able to retire.
    Mr. Chairman, my Democratic colleagues and I look forward 
to working with you on bipartisan ideas to help families save 
for retirement. Thank you again, Mr. Chairman, for convening 
this hearing. I look forward to the witnesses' testimony, and I 
yield back the balance of my time. Thank you, sir.
    [The statement of Mr. Sablan follows:]

  Prepared Statement of Hon. Gregorio Kilili Camacho Sablan, Ranking 
     Member, Subcommittee on Health, Employment, Labor and Pensions

    Thank you, Chairman Walberg. I appreciate you convening today's 
hearing.
    We are in the midst of a retirement savings crisis. Tens of 
millions Americans who work in the private sector lack access to a 
retirement savings plan at their jobs. This problem is particularly 
acute for people of color, as only 54 percent of African-American and 
Asian employees and 38 percent of Latino employees work for an employer 
that sponsors a retirement plan.
    And we know that many middle and lower income workers lack the 
resources to save enough on their own for retirement and that studies 
have shown that African-American and Hispanic families are far behind 
white families in retirement savings. That's deeply concerning.
    I look forward to today's discussion on how to ensure that everyone 
is planning and saving for retirement and can get the investment advice 
that's in their best interest.
    I hope that we explore bipartisan ideas, such as Open MEPs, aimed 
at incentivizing small business to offer retirement savings plans, and 
allowing those that do offer plans to automatically enroll workers into 
the electronic delivery of disclosures and other retirement plan 
documents. Last Congress, I was a co-sponsor of H.R. 2656, authored by 
Dr. Roe and Congressman Polis to allow for this kind of automatic 
enrollment of retirement plan communications.
    According to AARP, having access to a workplace retirement plan 
makes workers 15 times more likely to save, so we should be discussing 
ways to encourage or require employer sponsorship of retirement 
vehicles, such as automatic IRA legislation.
    We should also be examining ideas that address issues associated 
with job changes, rollovers and default investments that could better 
maximize employees' returns. And, recognizing Social Security as the 
primary source of retirement income, we must work to preserve and 
modernize and consider the impact of taxation of benefits on our 
retirees.
    Instead, one of the first items of business was to nullify two 
Obama Administration rules aimed at helping states and eligible 
municipalities expand working people's access to retirement savings 
programs.
    For instance, California passed a law and established a program 
that is estimated to provide 6.8 million workers access to a retirement 
savings plan. In Illinois, more than 1 million people are expected to 
benefit from the state's retirement savings program.
    These initiatives automatically enroll employees who are not 
offered a workplace savings plan and enable them to establish an IRA 
through a payroll deduction. State-based programs allow employees to 
opt-out if they do not wish to participate; and minimal administrative 
burdens are imposed on employers.
    These rules were simply intended to ensure that these state 
initiatives did not inadvertently run afoul of federal law. It is 
unfortunate that Congressional Republicans and the Trump Administration 
worked together to nullify them.
    As our full Committee Ranking Member, Mr. Scott, has said - 
Congress should not be in the business of destabilizing efforts that 
increase workers' ability to save for retirement. And we should not go 
out of our way to undermine states' rights to implement their own 
innovative solutions. I strongly agree with that.
    Additionally, the House passed Trumpcare that includes which is 
known as an ``age tax'' which would force Americans ages 50-64 to pay 
premiums five times higher than what others pay for coverage. AARP 
strongly opposes this provision and estimates it will would add an 
average of $3,200 annually to premiums for adults age 60 or older.
    I am concerned that if Trumpcare ever became law, just when 
Americans are at or approaching retirement age, they'd be facing 
skyrocketing premiums and wondering if they will ever be able to 
retire.
    Mr. Chairman, my Democratic colleagues and I look forward to 
working with you on bipartisan ideas to help families save for 
retirement.
    Thank you again, Mr. Chairman, for convening this hearing. I look 
forward to the witnesses' testimony. I yield back the balance of my 
time.
                                 ______
                                 
    Chairman Walberg. I thank the gentleman. Pursuant to 
Committee Rule 7(c), all members will be permitted to submit 
written statements to be included in the permanent hearing 
record. Without objection, the hearing record will remain open 
for 14 days to allow such statements and other extraneous 
material referenced during the hearing to be submitted for the 
official hearing record.
    [The information follows:]

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    
    Chairman Walberg. It is now my pleasure to introduce our 
distinguished panel of witnesses. Mr. James Kais is the Senior 
Vice President and National Retirement Practice Leader at 
Transamerica. He leads the firm's sales, strategy, and client 
development effort in the MEP Taft Hartley/Davis Bacon 
prevailing wage and infinity markets. Welcome.
    Mr. Erik Sossa is Vice President of Global Benefits & 
Wellness at PepsiCo, Inc. He is responsible for the design, 
administration, and compliance of PepsiCo's benefits programs 
around the world. Welcome.
    Dr. Jason Furman is a Senior Fellow with the Peterson 
Institute for International Economics. Previously, he was a top 
economic advisor to President Obama, serving as the 28th chair 
of the Council of Economic Advisors. Welcome.
    The Honorable Bradford Campbell is a partner at Drinker 
Biddle & Reath. From 2007 through 2009, he served as Assistant 
Secretary of Labor for the Employee Benefits Security 
Administration. Welcome.
    I will now ask our witnesses to raise your right hand.
    [Witnesses sworn.]
    Chairman Walberg. Let the record reflect the witnesses 
answered all in the affirmative.
    Before I recognize you to provide your testimony, let me 
just briefly explain our lighting system, which is not 
difficult to explain. Traffic light there. When it is green, 
you have five minutes of testimony. When it hits yellow, do not 
slide to a stop but start considering it, you have one minute 
left. When the red hits, try to finish your key thought as 
quickly as possible. I am sure a lot of what you would have 
said would be asked of you in questioning as well. We will ask 
our colleagues here as well to follow that same requirement in 
the five minutes of questioning.
    Now, let me recognize Mr. Kais for his opening statement.

  TESTIMONY OF JAMES KAIS, SENIOR VICE PRESIDENT AND NATIONAL 
            RETIREMENT PRACTICE LEADER, TRANSAMERICA

    Mr. Kais. Thank you. I'm Jim Kais, Transamerica Senior Vice 
President and Managing Director of our Retirement Practice. 
Transamerica is focused on helping customers achieve a lifetime 
of financial security. Of the 28,000 retirement plans we serve 
today, 306 are MEPs, which have been adopted by over 12,000 
employers, many of them small businesses, including 770,000 
participants.
    According to the Small Business Administration, the number 
of small businesses in the U.S. has increased 49 percent since 
1982. Small businesses represent 99.9 percent of the total 
firms and 48 percent of the private sector workforce.
    In addition, research from non-profit Transamerica Center 
for Retirement Studies in 2016 shows that 89 percent of workers 
who are offered a 401(k) or similar arrangement for retirement 
compared to just 47 percent of workers are not offered such a 
plan.
    Therefore, expanding retirement plan coverage amongst small 
businesses is critical to enhancing America's retirement 
security.
    My testimony will focus on three main points. Number one, 
we need to encourage small employers to provide plans through 
reforms that address the primary reasons that employers do not 
offer plans, which are costs, complexity, and concern about 
fiduciary liability.
    Under a multiple employer plan, many small businesses can 
join together to achieve economies of scale and avoid the 
administrative burden and liability of running the plan.
    Adopting employers delegate fiduciary and administrative 
services, such as the selection of the investment menu lined up 
for the plan, and share in the cost of the services.
    MEPs are a great way to provide coverage. 2016 research 
found that 22 percent of companies that do not offer a 401(k) 
or similar plan and are not likely to offer one in the next two 
years would be likely to consider joining an MEP, or multiple 
employer plan.
    In order to facilitate the adoption of a MEP, Transamerica 
actively supports two essential reforms. First, compliant 
employers in an MEP should be protected from liability for a 
non-compliant act or omissions of other employers in the MEP, 
and resulting disqualification of the entire plan, the so-
called ``one bad apple rule.''
    Second, the requirement that only employers with a nexus 
can join in a multiple employer plan should be eliminated. 
Permitting open MEPs will increase the number of small 
employers to provide a retirement plan for their employees.
    These reforms have long been advocated by both Republican 
and Democratic members in the House of Congress. In addition, 
the House Republican Task Force on Poverty, Opportunity, and 
Upward Mobility also called for open MEPs in its blueprint.
    Number two, Transamerica has consistently supported the 
spirit of the fiduciary rule that financial professionals 
adhere to the best interest standard when providing investment 
advice.
    Transamerica strongly supported the Roe-Neal and Roskam-
Neal fiduciary bills that were passed last year by this 
Committee and by the Ways and Means Committee, which 
established a workable best interest standard.
    Transamerica also has steadfastly maintained that the DOL 
fiduciary rule is not workable in its current form. The 
fiduciary rule must be delayed beyond the upcoming June 9 date 
to give the DOL sufficient time to review the current rule and 
is impact on retirement savings without further disruption to 
the market and harm to individuals.
    In addition, DOL must work with the Securities and Exchange 
Commission and the states in implementing a harmonized, 
manageable, and well defined best interest standard across 
product lines and distribution channels.
    Without significant reform, the fiduciary rule has and will 
likely to continue to negatively impact access to investment 
advice primarily by those less effluent customers who need it 
the most.
    In 2016, Transamerica's sale of annuities, a product that 
helps individuals manage their retirement savings to last a 
lifetime, fell by approximately 50 percent from the previous 
year. This figure translates to 35,000 fewer Americans who are 
not counseled to consider them a solution that would provide 
them with guaranteed income in their retirement.
    The fiduciary rule also significantly impacts small 
employers who seek advice from financial professionals on 
establishing and maintaining a workforce retirement plan that 
is tailored to the workforce.
    Due to the onerous nature of the fiduciary rule's 
documentation requirements, limitation on advice given with 
respect to plan investment options and exposure to class action 
liability, many professionals specializing in the small 
employer market have indicated they are limiting or 
discontinuing their services in this area.
    Number three, in addition to the points above, more can and 
should be done to encourage employers of all sizes to adopt 
plans and increase worker participation, as well as the ability 
to manage their savings to last a lifetime.
    Congress is encouraged to enact widely supported bipartisan 
proposals from the bill unanimously approved last year by the 
Senate Finance Committee, including open MEPs, to increase 
coverage by encouraging and facilitating the establishment of 
workplace retirement plans and the participation by employees 
in those firms.
    Transamerica commends Chair Walberg, Ranking Member Sablan, 
and other members of the subcommittee on their consideration of 
the important issue of multiple employer plans and employer 
plan coverage in general.
    We appreciate the opportunity to present our views on the 
particular challenges faced by small businesses in offering 
plans and our suggested approach to solutions. Thank you.
    [The statement of Mr. Kais follows:]

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    Chairman Walberg. Thank you. I now recognize Mr. Sossa for 
his five minutes of testimony.

  TESTIMONY OF ERIK SOSSA, VICE PRESIDENT, GLOBAL BENEFITS & 
   WELLNESS, PEPSICO, INC., ON BEHALF OF THE ERISA INDUSTRY 
                           COMMITTEE

    Mr. Sossa. Good morning, everyone. It's an honor to testify 
today. My name is Erik Sossa. I'm Vice President of Global 
Benefits for PepsiCo, and thank you for your important efforts 
to reduce regulatory burdens that can adversely impact 
retirement savings.
    I appear on behalf of the ERISA Industry Committee, also 
known as ``ERIC,'' so, yes, Erik is testifying on behalf of 
ERIC.
    ERIC is the only national association that advocates 
exclusively for large employers on employee benefit matters at 
the federal, state, and local levels. We are unique because we 
offer the sole perspective of companies providing benefits to 
tens of millions of workers and families across the country. My 
company alone covers over 140,000 participants in its 
retirement plans.
    ERIC's members voluntarily provide benefits and financial 
wellness programs that are essential for Americans' retirement 
security. Our plans offer security retirement savings 
opportunity, far better than anything employees could find on 
their own.
    We can all agree that retirement savings should be 
encouraged, and that the resources employers set aside to fund 
and manage retirement benefits should be used as efficiently 
and as effectively as possible.
    Today, I want to discuss four ways to support these goals 
and address the unnecessary burdens posed on retirement plans.
    First, electronic disclosures. Labor Department rules that 
hinder electronic communications with plan participants should 
be modernized. These rules were created 15 years ago. While 
printing and mailing communications to plan participants made 
sense in 2002, it should no longer be the default requirement 
in 2017. It should be an option that participants can choose at 
any time.
    It costs PepsiCo hundreds of thousands of dollars each year 
to print and mail required disclosures. For some companies, 
these costs are passed through to plan participants, which can 
decrease participant savings over time.
    Our written testimony proposes a common sense approach that 
will save employers and employees money, and more importantly, 
enhance the quality and effectiveness of employee 
communications.
    Second, efforts to locate missing participants. The lack of 
clear guidance from regulators combined with stepped up 
enforcement creates confusion and adds needless costs to 
retirement plans. Employers need clear guidance on reasonable 
and cost effective measures to find participants who through no 
fault of the employer cannot be located. Employers need to know 
when the reasonable effort standard has been met.
    Third, preemption. I cannot stress enough the success and 
importance of ERISA federal preemption. Without it, companies 
like mine could not provide benefits to families and workers 
effectively across the country. PepsiCo, like many ERIC 
members, has employees who live or work in every state. Being 
governed by a single Federal law rather than a patchwork or 
state and local laws is critical.
    ERIC supported the congressional resolutions to disapprove 
Labor Department, state, and local retirement plan regulations. 
While we support enhancing retirement savings opportunities for 
all Americans, we were concerned that the state and localities 
would seek to regulate retirement plans subject to ERISA.
    We see it with Oregon which announced imposing requirements 
on private employer plans. Employers providing benefits and 
complying with federal law should not face additional 
obligations imposed by state law. We urge Congress and the 
Labor Department to ensure that employers' retirement plans 
continue to be subject to uniform federal rules and not through 
a patchwork of state and local requirements.
    Finally, we ask for consideration on the impact of new 
policies on plan sponsors. Given the complexities of ERISA, new 
regulations or legislation, no matter how well intentioned, 
pose a risk of unintended and unnecessary costs on employers 
and plan sponsors that add little to no benefits to 
participants.
    We have a lot of experience administering retirement plans, 
and we gladly work with policy makers to help solve the 
intended problems while avoiding needless burdens.
    For example, the prior administration had pending 
litigation intended to encourage the use of annuities or other 
lifetime income options. The approach mandates that plan 
sponsors calculate and print onto 401(k) statements how each 
participant's retirement plan balance would translate into an 
annuity.
    However, this approach does not take into account that most 
plans do not offer annuity options, so the information is not 
meaningful, and confusing to plan participants.
    Another example is the fiduciary rule, which leaves plan 
sponsors uncertain about the exact measures that they must take 
to monitor recordkeepers of their plans.
    I hope these examples illustrate the opportunities that 
Congress and the new administration have to improve retirement 
savings and address the regulatory barriers affecting workers 
and families saving for retirement.
    Thank you again for this opportunity. I look forward to 
answering your questions.
    [The testimony of Mr. Sossa follows:]

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    Chairman Walberg. Thank you. Dr. Furman, I recognize you 
for five minutes.

 TESTIMONY OF JASON FURMAN, SENIOR FELLOW, PETERSON INSTITUTE 
                  FOR INTERNATIONAL ECONOMICS

    Mr. Furman. Thank you, Mr. Chairman, Ranking Member Sablan, 
and members of the committee for inviting me to testify on this 
important topic.
    I'd like to make six points that step back and provide a 
big economic picture and context, and then get to some of the 
specific policy issues.
    The first point is that in the last decades we've seen a 
transformation of our retirement savings system from one that 
70 percent of people who participated in had the defined 
benefit plan to one that is now down to 30 percent and 70 
percent instead have a defined contribution plan.
    My second point is at the same time, we have seen an 
increase in retirement insecurity. There are different measures 
that range from about one-quarter to one-half of households 
that are unprepared for retirement. In either of those cases, 
it's tens of millions, disproportionately younger, lower income 
and minority households, and that retirement insecurity has 
grown over time.
    My third point is that defined contribution plans offer a 
number of benefits in terms of transparency and portability 
that have made them attractive and are part of the reason for 
this shift, but they also come with two sets of risks.
    The first set of risks is the risk of losing your money in 
a down market. That risk is inherent to it, and the flip side 
of the higher returns. The second set of risks is the risk that 
participants will make bad choices, something that is not a 
problem in the defined benefit context in the same way. That 
risk is something that rules can help to ameliorate, and in 
doing that, help families save for retirement and increase 
their confidence in the retirement system.
    My fourth point is one of the bad choices that people can 
make is not to participate in our retirement system. They can 
do that because they work for an employer that offers them a 
401(k) and they forget to sign up for it, or because they don't 
even work for an employer and don't take advantage of IRAs and 
the other tax advantage options that people have for savings.
    Congress helped to remedy this issue for people who work 
for employers who offer a 401(k) through the Pension Protection 
Act of 2006, as a result of which many more employers have 
shifted to auto enrollment, a system that has a 50 percentage 
point increase in plan participation.
    For people who don't have a plan and offer from their 
employer, they are left without this. A decade ago, the 
Heritage Foundation came together with the Brookings 
Institution to come up with a bipartisan plan that would 
require employers to offer a payroll deduction, give a tax 
credit to employers to offset the administrative costs 
associated with offering that, and let employees opt out of the 
plan.
    This is something that would not impose any burden on 
businesses, and would give employees a choice whether they 
wanted to save or not. It would just set the default.
    The federal legislation to pass this never happened. A 
number of states are moving forward for experimentation. The 
rules under the Obama administration were intended to enable 
those states to experiment. Preventing them from doing so will 
not just interfere with the retirement security of those 
households, it will also interfere with our ability to learn 
from the experience of those states, which could help guide 
federal legislation in the future.
    My fifth point is that another mistake people make is to 
invest in low return/high fee funds. This is a mistake that is 
driven in part by the conflicted advice they get from 
retirement advisors who are in many cases well meaning, but in 
some cases are steering them to funds because they get higher 
returns from them.
    The Council of Economic Advisors, we estimate this 
conflicted advice cost $17 billion a year. Another way to think 
about that is you will run out of your retirement savings five 
years earlier or the typical household will lose $12,000 on 
rolling over.
    The rules that our administration finalized on this were 
ones that took into account the input of industry, created a 
best interest exemption, and made it easier for people to get 
better advice, saving households tens of billions of dollars.
    My last point, which I am happy to discuss more in the 
questions and answers, is retirement security depends not just 
on the specific features of the retirement system, but the 
overall economic context, not just growth and wages, as you 
correctly said, Mr. Chairman, but also, for example, the health 
system, and if people lack health insurance, that would make it 
harder for them to save for their retirement.
    Thank you.
    [The testimony of Mr. Furman follows:]

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    Chairman Walberg. Thank you. I now recognize Mr. Campbell 
for your five minutes of testimony.

 TESTIMONY OF BRADFORD P. CAMPBELL, PARTNER, DRINKER BIDDLE & 
                             REATH

    Mr. Campbell. Thank you, Chairman Walberg, the ranking 
member, and the rest of the members of the committee, for the 
opportunity to testify today regarding the regulatory barriers 
that we have in our system that face American workers and their 
families while they are saving for retirement.
    I want to stress that the views that I express today are my 
own. They're not necessarily the views of my clients or my 
firm. I'm here representing myself in my personal capacity.
    All of us here today share the goal of ensuring that 
American workers can retire with dignity and security, and in 
order to achieve that goal, we need to ensure that the 
regulations governing our retirement system are functioning 
efficiently, and they are achieving their intended purposes.
    As this committee knows well, ours is a voluntary system of 
employee benefits. Private sector employers generally are not 
required to offer retirement plans, but they do so because of 
the value that both employers and workers derive from their 
plans.
    That makes it all the more important that the regulatory 
environment that governs this voluntary system functions 
efficiently, ensuring worker protections while not imposing 
unnecessary costs and administrative requirements.
    Put simply, inefficient regulation, no matter how well 
intentioned the goal of that regulation, imposes a direct cost 
on the very workers the regulation is intended to help, and 
that cost can be quite significant. Workers can lose access to 
workplace plans as excessive and burdensome regulations stifles 
plan formation. Fewer workers will be covered by retirement 
plans at all if employers find the costs and complexity and the 
legal risk of administering the plan outweigh the benefits of 
offering it.
    This is already a significant concern for small employers 
in particular who are significantly less likely to offer plans 
than large employers.
    There are a variety of ways we can assist those small 
plans, but to help those small business workers, who really are 
best served by saving for retirement in ERISA plans, we can 
reduce the regulatory burden without sacrificing those worker 
protections by using multiple employer plans. Those would allow 
many small businesses to utilize a common, professionally 
managed and administered plan, without having to recreate that 
administrative wheel inside each separate employer.
    Inefficient regulation is also preventing plans from better 
serving the needs of their participants. As the retirement 
landscape shifted from defined benefit to defined contribution 
plans, participants increasingly need help in making decisions 
about their participation, their contribution amounts, and 
their investment allocations.
    Now, Congress did efficiently and the Labor Department did 
efficiently address some of these issues 10 years ago in the 
Pension Protection Act with automatic enrollment in the 
Department of Labor's qualified default investment alternative 
regulation, and plans adopting these auto enrollment strategies 
have seen significant increases in participation, and 
therefore, ultimately, in retirement outcomes for those 
workers.
    Unfortunately, we are poised to do the opposite next month. 
On June 9, the Department of Labor's flawed fiduciary 
regulation is scheduled to become applicable. Although well 
intentioned, this rule is in my opinion the poster child for 
inefficient regulation that will hurt the very people it is 
intended to help.
    The problem is not in the concept of ensuring quality 
retirement advice and assistance. It's in the execution of the 
rule itself. This incredibly broad and far reaching rule makes 
the Labor Department a primary regulator of the conduct and 
compensation of financial professionals to roughly $15 trillion 
in IRA and retirement plan assets, effectively trumping the 
traditional rule of other more experienced financial regulators 
like the SEC and State Insurance Commissioners.
    It creates massive new class action liability risks 
resulting in enforcement by litigation, which is perhaps the 
most inefficient means possible, as it siphons money out of the 
retirement system and into lawyers' pockets.
    All these changes are resulting not just in one time 
transitional costs but in ongoing costs and risks that will be 
borne ultimately by those retirement investors.
    The Obama administration predicted significantly positive 
benefits from this rule, and these rosy academic projections 
largely dismissed what are now proving to be real costs and 
real problems in the real world.
    President Trump has ordered the Labor Department to review 
the effects of the rule to determine what it would do to access 
to advice and if it would increase the cost of advice for 
retirement investors, and as part of that the rule was delayed 
until June 9, and also additional information was requested 
about the actual effects now that we have 12 months of real 
world experience in compliance efforts with the rule.
    This new empirical evidence based on actual experience 
shows that the academic predictions that dismissed the rule's 
harmful effects were wrong. Advisors and financial institutions 
are reporting increasing minimum asset requirements for 
advisory accounts, a shift from commission based accounts to 
more expensive fee based accounts, reduce the investment 
product offerings, increase litigation costs, increase 
liability insurance costs and others.
    More troubling, the Investment Company Institute surveyed 
its members, the mutual fund companies, and found the number of 
orphan accounts, the accounts that used to have an advisor but 
no longer do, have increased significantly, and the average 
balance of those accounts was just $17,000, the small investors 
who are losing out as a result of this rule.
    I look forward to answering your questions. I would simply 
state that based on the evidence we've seen so far, it's 
imperative that the Department of Labor further delay the 
fiduciary rules applicability date until it has completed its 
review of this new information.
    Thank you, sir.
    [The testimony of Mr. Campbell follows:]

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    Chairman Walberg. Thank you, and I thank each of the 
witnesses for your testimony. You have given us plenty range to 
ask further questions. Thank you.
    I now recognize the chairwoman of the full committee, Dr. 
Foxx, for her five minutes of questioning.
    Mrs. Foxx. Thank you very much, Mr. Chairman. Mr. Kais, the 
Obama administration issued guidance in 2015 relating to the 
state run MEPs. In doing this, the DOL exempted the state run 
MEPs from the employer-based nexus requirement, declaring that 
a state has a ``unique representational interest between itself 
and its citizens.''
    Can you explain why it is troubling for states to receive 
special treatment in this regard while private sector MEPs have 
this bureaucratic requirement?
    Mr. Kais. Yes, thank you for your question. It's been very 
frustrating to comply with commonality requirements in the 
private sector. We work with cooperatives, trade associations, 
and there is a battery of tests they need to pass effectively 
to offer a multiple employer plan that's closed. That not 
existing in the public sector creates an uneven playing field, 
and it also makes the cooperatives and the trade organizations 
hesitant to put a MEP together because they're afraid they 
might trip a rule or law that does not exist on the public 
sector side today.
    Despite that, we've still been somewhat successful helping 
those organizations, but it's only the tip of the iceberg. If 
we had an even playing field, if both types of plans were 
covered by ERISA and they were voluntary, I think that would 
create more innovation and allow us to reach more of the 
constituents you want to reach, which is the small business 
community and their employees.
    Mrs. Foxx. Thank you very much. The federal government has 
not done a fantastic job of investing Social Security payments 
over the years. I know many, many state governments, in fact, I 
think just about every state in the country, has tremendous 
unfunded liabilities right now in terms of their retirement 
plans.
    So, our governments do not have great histories of helping 
people invest their money over the years. So, encouraging more 
of that at the state and federal level, it does not seem to be 
a really smart thing to be doing.
    Thank you. Mr. Campbell, I appreciate very much. I was 
going to ask some questions related to the last part of your 
testimony, and I do thank you for talking about the potential 
cost of the regulation, and the fact that the President has 
asked for a study of the rules. Thank you very much for 
bringing that up.
    The committee has written DOL twice in the last two months 
urging the Department not to allow the fiduciary rule to go 
into effect until the Department's new economic and legal 
analysis of the flawed rule is complete, which we hope will be 
conducted in accordance with the memo from the President.
    Can you speculate on what information might come to light 
as a result of the analysis that could justify significant 
revision of the rule?
    Mr. Campbell. I think we've already seen some very 
important again real world data from the last 12 months 
roughly, 12 to 13 months of experience, in trying to comply 
with the rule.
    It was in April of 2016 that the administration promulgated 
this fiduciary rule, and it was at that time based, of course, 
on prospective predictions about the future based on academic 
studies. There has been a great deal of criticism about those 
studies and what they adequately considered and what they 
didn't.
    In part, now that we have actual real world experience, 
we've now seen how did companies respond to the new 
requirements, what happened. What we have seen is that it is 
becoming more difficult for small account balance savers to be 
able to get access to advice.
    We also know, by the way, one thing that I think is worth 
pointing out, that a lack of access to advice itself has a 
significant cost.
    The Labor Department back in 2011 estimated what's the cost 
of lack of advice to people in plans and IRAs, and they 
calculated it at over $100 billion a year. That's a significant 
issue that needs to be balanced, in the new economic analysis.
    Mrs. Foxx. Do we not just love it that academics can make 
predictions, and the real world comes to play, and we get such 
different results. Thank you very much. I want to thank all of 
our panelists for being here today. Thank you, Mr. Chairman. I 
yield back.
    Chairman Walberg. I thank the gentlelady. I am pleased to 
recognize the gentleman from Virginia, our ranking member on 
the full committee, Mr. Scott.
    Mr. Scott. Thank you, Mr. Chairman. Dr. Furman, your fifth 
point says that a poor decision is to get into higher fee, 
lower return investments. How is it legal for an investment 
advisor to put someone into a higher fee, lower return 
investment for a retirement account, and is the standard for 
advice different with the SEC and Department of Labor?
    Mr. Furman. The issue is that when you move from the 401(k) 
world, where people generally do get good advice, into the IRA 
world, you make this really critical decision of how to roll 
your funds over. You do this decision once in your lifetime. 
It's a really complicated one. You don't realize that all of a 
sudden the rules have shifted, that your advisor doesn't have 
to act in your best interest.
    There has been a lot of evidence here. The academic 
evidence on this is very clear, very strong, very bipartisan. 
The report we did was reviewed by both outside Republican and 
Democratic economists, all of whom agreed with it, and we can 
talk a little bit if you want later about what the real 
experience has borne on this topic as well.
    Mr. Scott. How are the state plans that were sabotaged 
different from what the Heritage and Brookings had recommended?
    Mr. Furman. A lot of those states are in the process of 
setting up plans and haven't fully set them up yet and figured 
out all of the details, but the basic idea is to make sure for 
people who are falling through the cracks in our current system 
that they have an opportunity to save. That was in the 
Heritage/Brookings' plan, and that is a central feature of the 
state plans. None of them require anyone to save who doesn't 
want to. In all of these cases, it's an option, an option that 
anyone could easily opt out of.
    Mr. Scott. There is a difference between participation when 
you have to opt out as to opt in. Can you comment on that?
    Mr. Furman. There is a very big difference in 
participation. The one thing that Mr. Campbell and I agreed on 
was the Pension Protection Act has extended to employers auto 
enrollment, and I think that's widely viewed as a very good 
thing. It's increased enrollment in employer plans, and most of 
the evidence is it's increasing enrollment for people that it 
really made sense for, and are happy that choice was made 
easier for them.
    Mr. Scott. Thank you. Mr. Campbell, you mentioned the 
multi-employer plans. What are the challenges in getting people 
to join a multi-employer plan, to have new plans come in? Is 
this a last man standing rule? Can you comment on whether or 
not that prevents people from coming into plans?
    Mr. Campbell. Yes, there are several barriers currently to 
multiple employer plans functioning as we would hope they 
would. That's one of the concerns. There is the kind of one bad 
apple issue, the other is the DOL commonality regulations 
historically.
    I assisted a client in setting up a bona fide trade 
association MEP, and that process was one of the more 
frustrating I had gone through, in trying to figure out exactly 
where the contours of all the rules worked together.
    I think it's a great example of whether it's through DOL 
regulation or congressional legislation, there is a real 
opportunity to improve the availability of plans by addressing 
those problems.
    Mr. Scott. Many of the multi-employer plans are close to or 
in fact are insolvent. That challenge can be addressed if more 
would actually come into a plan, you could probably get through 
the short-term insolvency.
    I think the things you have suggested would support 
expanding the ability to get into these plans. Can you say how 
that would affect insolvency of some of the plans going on now?
    Mr. Campbell. Well, I apologize if I misunderstood your 
question, sir. We have all these fun terminology, the multiple 
employer plan, the multi-employer plan. I apologize. I thought 
you were referring to the multiple employer plans.
    On the multi-employer plan situation, as you have 
suggested, there is a significant concern about insolvency, 
particularly among certain plans. I think there is a lot of 
active consideration in Congress as to which are the best 
approaches to address that, whether it's expanding those to new 
entrants, which does, of course, run the risk of ensnarling 
more people in a troubled plan, although that could also, as 
you said, address the solvency.
    I think one of the areas there we ought to look at is 
looking at the Treasury and PBGC abilities to look at those 
plans and figure out what the best way to either unwind them or 
find an alternative solution.
    Unfortunately, there's not an easy answer to that. I think 
the solution depends in fact on which multi-employer plan you 
are looking at, how badly underfunded it is, and which industry 
it's in, to really assess whether it is reasonable salvageable.
    Mr. Scott. Thank you. Thank you, Mr. Chairman.
    Chairman Walberg. I thank the gentleman. Mr. Wilson is 
recognized for five minutes.
    Mr. Wilson. This is for Secretary Campbell. American 
families should look forward to retirement. Yet, too many find 
themselves without the financial security they need to retire. 
Congress should support initiatives to place retirement 
decisions in the hands of American families, yet today we have 
a 1,000 page ridiculous regulation which increases barriers, 
which is insulting, I think, to financial advisors and to the 
people that I represent, where the regulations have been 
determined that the people I represent are not intelligent 
enough to know how to make choices.
    We need to make a change. That is why in January there was 
legislation introduced, H.R. 355, the Protect the American 
Families Retirement Advice Act, which would delay for two years 
the rule for further analysis.
    In February, the President announced in a memorandum asking 
for further analysis. However, the Department of Labor has 
indicated they may move forward with the June 9 date even if 
the analysis is incomplete.
    Mr. Secretary, you have already cited real world, not 
academic concerns, but it is important again that the American 
people know what harm is being done. If the Department of Labor 
does not move and change the June 9 date before completing the 
analysis, what would be the effect on the American families?
    Mr. Campbell. Unfortunately, I think many of the harmful 
effects that have already begun in part as companies have 
positioned themselves for compliance will continue. 
Unfortunately, in delaying the deadline by 60 days, they didn't 
change any of the underlying problems with the actual text of 
the fiduciary rule.
    I'll give you an example. Unless the Trump administration 
does a change to the regulation, beginning January 1, 2018, 
there will be no way for an insurance agent to recommend to you 
a fixed index annuity, because they are compensation, the 
commission they would earn in the normal course of selling an 
annuity would become illegal, and there is no exemption 
currently constituted that works for an insurance licensed only 
entity who is an independent agent, because there is no 
financial institution that represents them.
    That's something that the prior administration started to 
address with a class exemption, but it's an example that this 
regulation isn't fully baked, and has a significant number of 
operational problems and execution problems that haven't been 
addressed yet.
    So, I would hope that the Trump administration does delay 
it further in an effort to evaluate the rule as well as to fix 
some of those operational concerns.
    Mr. Wilson. Well, your input is very helpful. Mr. Kais, the 
former Department of Labor seemed to argue that robo-advisors 
and other types of low, expensive, passive investment options 
are best to fill the void of this burdensome and expensive 
regulation.
    Now, robo-advisors, as I understand, and you can correct 
me, are automated websites that people access on the Internet 
with minimum human interaction. Goodness gracious, that is 
ridiculous. Please. People make a difference, particularly 
financial advisors who are of the highest integrity.
    Do you believe that people planning for retirement that 
have access to the computer software programs have the ability 
to navigate the programs, the ability to appropriately 
translate the data on their specific retirement plan and 
assets? If not, is it not difficult to suggest that robo-
advisors are capable of filling the gap left by this 
overreaching ridiculous regulation?
    Mr. Kais. Thank you for the question. In actuality, what 
happens in business is even if an employee self-services into 
an online mechanism, they are generally making their call to 
somebody else to make sure, is this right, did I do it right. 
Even if they go into the web, they still need some guidance and 
some reassurance that it is done.
    A problem with that, if you walk into a human resources 
representative of your firm and you ask did I do the right 
thing, does this look right to you, that H.R. representative 
could trip the fiduciary regs by just giving casual advice to 
that employee to try to help them along. I think that is 
problematic.
    LIMRA also published a study recently that 80 percent of 
people seek advice from someone when doing a rollover. Out of 
that group, 58 percent obtained a professional advisor's 
financial advice during a rollover.
    As much as we would like to think people self-service into 
the online system, that's not generally true, and when they do, 
they generally call to make sure they're doing it right.
    Mr. Wilson. Thank you very much.
    Chairman Walberg. I thank the gentleman. I recognize the 
gentleman from New Jersey, Mr. Norcross. He has left the room. 
I recognize the gentlelady from Ohio, Ms. Fudge.
    Ms. Fudge. Thank you very much, Mr. Chairman. Thank you all 
for being here today. Mr. Furman, in your testimony, you 
indicate that tens of millions of Americans are at risk of 
having an insecure retirement.
    What in your opinion are the most significant barriers to 
saving for retirement, and the second part of that question is 
when so many families have not had a raise in so long, and they 
are trying to figure out where to spend those resources, what 
are the most significant steps Congress can take to help 
working families save for retirement?
    Mr. Furman. Thank you for that question. The barriers are 
one-third of households who don't have any retirement plan 
offered to them face a very large barrier. A second is people 
who have a plan offered to them and don't participate. A third 
barrier is people who get lower returns. A lot that is not in 
the 401(k) phase, but often when they roll their money over 
into an IRA, and their returns get eaten away by these really 
large fees that are associated with this advice.
    None of these advice people are doing this free. People 
aren't doing this advice out of the goodness of their heart. 
They're doing this advice because they are going to be paid, 
and they are being paid through a set of commissions which come 
out of in a non-transparent way these households.
    Improving this, I think, involves both the retirement 
system itself, remedying things like the tax incentives in the 
retirement system are disproportionately for high income 
households rather than low and moderate income households. It 
also involves the broader economic issues of what can be done 
to raise the incomes, especially low and moderate income 
households, like minimum wage and health insurance, that this 
committee has championed.
    Ms. Fudge. Thank you. It just seems as though it just goes 
along with what happens here every day, find a way to give rich 
money more and make poor people just be poor.
    Additionally, Mr. Furman, you mentioned that TrumpCare is 
perhaps the most consequential policy issue for retirement 
savers this Congress has considered thus far.
    Can you elaborate on that and discuss the overall effect of 
rising health care costs on people's ability to save?
    Mr. Furman. Sure. The CBO analysis of the original American 
Health Care Act, which is the only analysis I'm aware of, said 
that for households that were older, it would result in higher 
after tax premiums, and for households that were lower income, 
it would result in higher after tax incomes.
    These are precisely the households for whom it's most 
important to save and are at the most risk for retirement, so 
if they are paying, and under the CBO analysis, some of these 
households are paying an extra $12,000 a year, that is $12,000 
a year less they could devote to a range of things, including 
retirement savings.
    The other thing is the analysis showed those plans would 
result in higher deductibles and higher out-of-pocket payments. 
Again, that's another place where your health costs would be 
competing with your retirement savings.
    Overall, if you have a health bill that is subtracting 
money from the health system and using that money to pay for 
tax cuts for high income households or for any other purpose 
for that matter, it's likely to increase retirement and 
security.
    Ms. Fudge. We are very clear that TrumpCare really is a 
plan that benefits the young, the healthy, and the wealthy, and 
sort of punishes significantly the sick, the poor, and the 
elderly. So, we do indeed know it is going to affect their 
retirement.
    Last question for you, Mr. Furman. I am glad you talked 
about the fact that these advisors are not doing this out of 
the kindness of their hearts, but in fact, they do get paid.
    If you could just talk a bit about the fiduciary rule, and 
why it is winning in the courts, as a matter of fact, even 
though it is so significantly flawed, as I keep hearing, and 
the ramifications for not allowing the rule to go forward.
    Mr. Furman. Sure, thank you for that question. Academic 
evidence helped inform the rule, an extensive consultation 
process, that was about as extensive as any I have witnessed in 
my eight years in the Obama administration, where we talked a 
lot to industry, to all stakeholders, which helped inform it, 
too.
    To be clear, the rule has costs and benefits. It has both. 
We documented both. I don't disagree with the costs. Those 
costs are largely borne by parts of the financial industry that 
were benefitting at the expense of middle class households, and 
those benefits go to middle class households.
    So, I'm not surprised that there is opposition to it. Many 
of those costs, by the way, as Mr. Campbell said, have already 
been incurred, so if you reverse the rule at this stage, you'd 
be left with all the costs, and you wouldn't get many of the 
benefits that households would get, and those benefits are they 
would continue to get advice, as they have in Australia, the 
U.K., and other countries that have done more far reaching 
rules, they get better advice, have more retirement savings, 
and the system as a whole would benefit as a result.
    Ms. Fudge. Thank you very much. Mr. Chairman, I yield back.
    Chairman Walberg. I thank the gentlelady. I am pleased to 
recognize the gentleman freshly back from a great honeymoon, 
and we congratulate you and recognize the fact you even joined 
us in our field hearing event out in San Francisco on your 
honeymoon. That is dedication.
    Mr. Roe. I took one for the team.
    Chairman Walberg. I am pleased to introduce Dr. Roe.
    Mr. Roe. Thank you very much, Mr. Chairman. I have had a 
passion since I began my medical practice in 1977 for 
retirement savings. We started a retirement plan as a small 
business with four doctors and 12 employees. We now have 450 
employees and 120 providers in our practice.
    I also served as the Mayor of Johnson City, Tennessee where 
we provided retirement benefits for the teachers and the city 
employees.
    I have had extensive experience in starting a pension plan, 
and now seeing people in my practice that have benefitted from 
it for 40 years. I can assure you that the investment advisors 
that we started with were not fiduciaries, they helped us set 
up a plan that we could afford and put money in for people.
    One of those first 12 employees still works for my 
practice, and has multiple, six figures, in her retirement 
plan. She is a medical assistant. I am very, very proud of that 
fact. I have seen other people retire and have that.
    To assume that people because they are investment advisors 
are there just to take your money is offensive to me. My 
investment advisor has been with me for 25, maybe now 30 years. 
They are just like my doctor, my attorney, part of my family.
    I think we should start saving at birth. Mr. Polis and I 
have a bill that we are going to introduce this year that will 
do just that. I agree that we do not start saving enough or 
soon enough. We are going to start trying to put a plan in 
where you do that.
    The fiduciary rule, in my opinion--this is just someone who 
has done a pension plan, I believe it does deter and prevent 
people in small business.
    Mr. Sossa, I want to get to you and just ask you about the 
current regulations that establish different requirements for 
electronic delivery depending on the type of disclosure being 
provided to a plan participant. Could you just deal with that a 
little bit?
    By the way, I apologize for having a Diet Coke up here.
    Mr. Sossa. Your question was with the lifetime disclosure 
regulations?
    Mr. Roe. Yes, sir, if you could.
    Mr. Sossa. I can't really think of many acts that come out 
that really we are opposed to in their intent. We were trying 
to help employees. We fully agree. We have been providing 
financial education since 2008. The challenge is we'd like to 
have that discussion with employees, but not in the context of 
a statement that's really taken out of context.
    Most of our front-line employees are in defined benefit 
pension plans. They are active and live. So, that is only one 
part of their retirement.
    I would prefer to have that dialogue in a much more 
comprehensive financial education discussion rather than a 
sheet of paper which all I can guarantee you is that number is 
going to be wrong. The assumptions that go into that, interest 
rates, mortality, when someone is going to retire, that number 
is not going to be accurate.
    With the 85 percent of our workforce blue collar, I know in 
three to five years, someone is going to come back and ask for 
that number, and I'm not going to be able to explain what it is 
and how it fits into their retirement.
    Mr. Roe. Secretary Campbell, could you also discuss, and I 
know you have in some detail, about the effects of the 
fiduciary rule, which I was very involved in the last Congress 
and this one also.
    Mr. Campbell. I apologize, sir.
    Mr. Roe. On the fiduciary rule, could you delve into that a 
little bit, the effects of it?
    Mr. Campbell. Yes, sir. Again, I think it's not that it's a 
bad concept. I think it truly is the execution that the Labor 
Department has gone through in trying to implement this.
    What the Labor Department has done is equated the way an 
advisor gets paid with whether or not the advice is of the 
sufficient level of quality. So, you end up with these very odd 
results, where as I mentioned before, because of the way they 
do the exemptions, which allow you to potentially get paid for 
a form of payment they don't approve of, if you follow all the 
special conditions, not all of those conditions are in place, 
so there are in fact advisors, particularly insurance agents in 
the current environment, who come January won't be able to give 
advice on a variety of products, even if that advice is in your 
best interest.
    So, those are some of the odd outcomes that result from a 
rule that's been poorly executed, and a lot of that, I think, 
does have to do with Labor Department's overreach.
    Something Dr. Furman said that I think is worth mentioning, 
he talked about the extensive consultation with the financial 
services industry, and in his testimony, he alluded to changes 
in the BIC exemption that addressed those. I think it is 
important to note that what happened with the BIC exemption is 
it went from a proposal that was literally unworkable to a 
final regulation that is merely terrible in how it works.
    I think that's a modest improvement but not one that I 
think we should be proud of.
    Mr. Roe. Just for the record, Mr. Chairman, I know the CBO 
estimated that the ACA shop would have 4 million people in, now 
it has 250,000 being shut down, the CBO estimated there would 
be 24 million people getting their insurance through the ACA 
and the individual market, less than 12.
    I would ask unanimous consent that we submit these two 
documents for the record.
    Chairman Walberg. Without objection. Hearing none, they 
will be submitted.
    Mr. Roe. Thank you, Mr. Chairman.
    Chairman Walberg. I thank the gentleman. I am pleased to 
recognize the gentlelady originally from Michigan and now 
impacting in Oregon in a great way, Ms. Bonamici.
    Ms. Bonamici. Thank you very much, Mr. Chairman, and thank 
you to all the witnesses for this important conversation today.
    Retirement security is an issue that comes up no matter 
where I am in Northwest Oregon, and we know working families 
across the country should be able to retire with security and 
dignity, and unfortunately, that is still not the reality for 
too many people. A lot of people still struggling to make ends 
meet and cover emergency medical bills or a car accident. There 
are millions of private sector workers who do not have access 
to retirement savings plans at their jobs.
    I really see that as a role for Congress, something we can 
be doing to help those families who are facing retirement 
without that security.
    I want to ask a question, but I just want to make a 
statement about the fiduciary rule. I sat in many long hearings 
in this very room listening to people from the industry and 
from the Department of Labor talk about that. Everybody from 
the industry agreed there should be a fiduciary standard, in 
this room.
    I just want to echo Dr. Furman's comment, this rule took a 
lot of time, they went back to the drawing board, they took a 
lot of input from industry when they crafted that rule and made 
a lot of changes in large part because of concerns they had 
raised.
    I am certainly glad to hear all of you echo that investment 
decisions should be made in the best interest of the consumer.
    Mr. Kais? Did I say your name right?
    Mr. Kais. It's Kais. Close enough.
    Ms. Bonamici. I noted in your testimony, you said 
Transamerica supported the joint resolution, and I know Mr. 
Sossa did as well, nullifying the prior administration's rule 
allowing states, like my state of Oregon, to establish 
workplace retirement savings programs for private sector 
workers who do not have access to one.
    I have, of course, followed that process in Oregon quite 
closely. Your footnote in your testimony states ``We supported 
the rescission because the state-based IRAs would have 
undermined the adoption and maintenance of plans subject to 
ERISA, which provide far greater benefits and protections than 
the state IRAs.''
    I noted on Transamerica's Web site that you offered a 
Transamerica IRA, which I understand is basically a traditional 
IRA or a Roth IRA. Now, those may be great for retirement 
savings, but they are not ERISA plans.
    I am a little curious about how Transamerica can oppose 
state efforts like Oregon's, which is essentially a Roth IRA, 
how can they do that, when Oregon has tried to expand access to 
retirement programs. You oppose it because it would not be 
subject to ERISA, but then simultaneously, you are offering 
products that are not subject to ERISA.
    I want to note before you answer that the Oregon program 
was set up again with a lot of input, especially a lot of small 
employers who welcomed this opportunity. It is a Roth IRA, 
which is what you offer. In our state, it stays with the worker 
from job to job. People who do not need to participate, they 
can easily opt out at any time if they do not want to be in.
    It is overseen by a board, underneath the State Treasurer. 
It is managed by a private firm that was selected through a 
competitive bid process, and the safe harbor rule only applied 
if certain conditions were met.
    I am a little curious, it seems inconsistent that you offer 
a Roth IRA and then you are saying Oregon cannot do that under 
these circumstances.
    Mr. Kais. Yes, we offer a Roth IRA and IRA as you do. I 
think the confusing part for us is when there is a mandate to 
automatically enroll into that IRA, that is to us what would 
trigger ERISA coverage.
    I think it's fine. We support the state offering programs 
that could cover more employees. If it's a qualified plan, we 
believe those employees deserve the protection of ERISA. If 
it's an IRA and there is a mandate, those plans often have no 
employer matching contribution. They have lower contribution 
limits than a qualified plan. There has been no economic 
analysis on the cost and ability for states to manage those 
plans.
    Ms. Bonamici. Before my time runs out, I just wanted to 
mention there is a great book on behavioral economics by Cass 
Sunstein and Richard Thaler called ``Nudge.'' Encouraging 
people to take steps that are beneficial to them. This might 
come down to the definition of ``mandate'' versus 
``voluntary.'' People are going to opt out of this at any time 
easily. I do not see that as a mandate.
    Today, I am introducing the Preserved Rights of States and 
Political Subdivisions to encourage the Retirement Savings Act, 
which is the Freedom to Prosper Act also being introduced in 
the Senate, that would codify the Obama administration's 
actions to remove the barriers--that is what we are talking 
about today--removing barriers that prevent workers from saving 
for retirement.
    I really see a role for Congress to help get people into 
these products that help them save for retirement, and I hope 
we can have further conversations about how to do that.
    I am out of time, and I yield back. Thank you, Mr. 
Chairman.
    Chairman Walberg. I thank the gentlelady. I am confident we 
will have further conversations. Now, I am pleased to recognize 
my good friend and colleague from Michigan, Mr. Mitchell.
    Mr. Mitchell. Thank you, Mr. Chairman. Let's start with 
you, Mr. Kais. I will give you a little time to talk about 
these private sector MEP programs administered by the state, 
and all of the long discussion that occurred about their value, 
exempting them from the requirements.
    Was there some kind of sound public policy reason why they 
were exempted other than political expediency? Can you explain 
that to me?
    Mr. Kais. I have no idea. It doesn't make sense to me. I 
think if we are talking about protecting workers, I think ERISA 
provides a lot of protection. I think we should want that 
wherever we are providing a retirement solution, whether it's 
public or in the private sector.
    Mr. Mitchell. Mr. Campbell, can you shed light on where the 
sound public policy is for making those exemptions?
    Mr. Campbell. I share the same question that you have. If 
you look at the history of how the Department of Labor has 
interpreted multiple employer arrangements and what the 
commonality nexus needs to be, I think that's been based more 
on a creation of their own policy than it is on the underlying 
law.
    When the issue came up in the guidance, in the 
Interpretative Bulletin dealing with state sponsored MEPs, they 
basically determined that without really a whole lot of 
analysis other than well, states represent the people, 
therefore, states can do this, and they have an inherent 
interest that is different than private employers.
    Personally, I think the DOL position historically has been 
wrong, and there shouldn't be a barrier to open MEPs, and that 
is something I think the DOL could change. During the Obama 
administration in one of the budget submissions, it indicated 
it would change. That just never happened.
    Mr. Mitchell. I am entertained by policy guidance rather 
than actually issuing regulations, but that is a whole other 
separate conversation that we will have in OGR.
    Mr. Sossa, I can ask you this question that I cannot ask 
the other two because of their fiduciary responsibilities. If I 
told you there was a plan I was considering investing in, their 
funded liability had fallen to 37 percent, that their unfunded 
liability was $130 billion, but hey, it sounded like a heck of 
a deal to me.
    As a friend, we are out having a beer on the golf course or 
something, would you tell me that is a great idea?
    Mr. Sossa. I will not speak on behalf of ERIC.
    Mr. Mitchell. That is why I asked as a friend.
    Mr. Sossa. As someone who has been 20 years in benefits, 
no. We typically look for plans that are funded much better 
than that. We typically look at benefits accrued, at least 
funded to what your accrued liability is, whether your benefits 
earn today, at least funded to those, and some margin towards 
your benefits accrued toward the future.
    Mr. Mitchell. I generally do, too, so I was shocked when 
one of my colleagues raised up the state of Illinois as being 
an incredible place. These state plans could clearly do well.
    The state of Illinois state retirement plans have $130 
billion unfunded liability. That is not something made up. This 
is a bipartisan group. The state fiscal agency does it. Here is 
the reason they have fallen short. In fact, they have lowered 
the long range investment returns on the plan, that in fact the 
plan is under performing from the assumptions they made 
themselves, leaving either the state or the employees on the 
hook.
    Yet, we want to give more flexibility to the states to 
create plans for private sector employees because they are 
better shepherds of the money than private investment groups? 
Somehow, we are worried about fees when in fact they are not 
doing well. I guess I am a little stymied on what the logic on 
that would be. Can you help me with that?
    Mr. Sossa. I can speak about what we bring to the table, in 
the spirit of large employers. There are three key advantages 
that we bring to our programs. We bring professional 
management, experts in the field, selecting investing/
investment choices, putting employer money into a lot of our 
plans. The other is a level of professional tools and resources 
that we can provide to the programs.
    In the context of what we're trying to preserve here, it is 
that type of value that we bring to the table. I think all the 
intent of expanding programs to state levels, and all exactly 
completely align, what employers are looking for, we agree on 
the problem, allow us to develop the solutions that are 
pertinent and flexible to the populations we own and we manage.
    Mr. Mitchell. Let me get this one question out because I do 
not want Dr. Furman to feel neglected from this side of the 
aisle over here.
    My background is economics and public policy. I did not 
have the good fortune to go to Harvard, I had to get a real 
job, could not go get a Ph.D.
    I appreciate your comments in the written testimony and 
your oral testimony. Yes, access to health care is important, 
long term economic viability, but it is also affordability of 
insurance, affordability of actually getting health care, and 
we have seen ample demonstration that ACA did not do that.
    If you could talk about what does do that rather than try 
to defend something that is clearly falling around our ears, 
that would be productive in a public policy discussion, if you 
want to have that debate, call my office, I am happy to have it 
and we can talk about economics as much as you like.
    Let's try to move forward rather than try to defend 
something that most people say unless we throw more money, it 
is a train wreck.
    Thank you, and I yield back.
    Mr. Furman. Did you want me to respond to that?
    Chairman Walberg. Since we are fair around here, and I am 
sure my colleague would want to be fair, a brief answer or 
response.
    Mr. Furman. I agree very much that our goal should be 
lowering the overall cost of health care, and if you do that, 
you can make everything better, the solvency of Medicare, the 
premiums families pay, the cost to the federal government.
    There are a number of steps in the Affordable Care Act to 
reform delivery system, many of which this Congress built on in 
the MACRA legislation, extending it to physician payments as 
well, shifting to alternative payment models.
    Partly as a result of that, we have seen health costs as 
measured by the PCE growing at the slowest rate they have grown 
since the passage of the Affordable Care Act. I think more 
needs to be done.
    I would cite two things. One is aggressive implementation 
of the tools that Congress gave to HHS on a bipartisan basis in 
MACRA, less bipartisan basis in the ACA. Second, giving private 
sector an incentive to continue to control costs by making sure 
we're not conferring tax advantages on very expensive health 
plans and the Cadillac tax was intended to do that, but I am 
happy to continue that discussion.
    Chairman Walberg. I thank the gentleman. It was 
significantly less bipartisan involved in the ACA. I think the 
figure was zero.
    Now, I am pleased to recognize the gentlelady from 
Delaware, Ms. Blunt Rochester.
    Ms. Blunt Rochester. Thank you, Mr. Chairman, and thank you 
to the panel. I guess I will start off by saying I am glad this 
is a bipartisan issue that we are dealing with here, 
particularly when we talk about retirement and the security of 
families and individuals.
    In my state of Delaware, over 90 percent of our businesses 
are small businesses. This is a really important issue, 
particularly with the MEPs.
    I wanted to address my question to Mr. Kais. In your 
testimony, you mentioned that 89 percent of workers who have 
access to retirement savings plans, like a 401(k), are saving 
for retirement, but only 47 percent of workers who are not 
offered a workplace savings plan are doing so.
    Based on those numbers, I think we all would agree that we 
need to encourage more of that. Can you explain how open 
multiple employer plans could help address this problem, and 
also talk a little bit about the elimination of the one bad 
apple rule?
    Mr. Kais. Sure. I've done a little bit of work with the 
Chamber in Delaware, so it's great to have your question, thank 
you.
    Open MEPs clearly would help as it would relate to removing 
barriers, to having employers pull together to gain lower costs 
for their retirement plans, to eliminate administrative burden, 
and to reduce fiduciary risks. Those are the three reasons why 
employers don't have a plan today by and large.
    If you're not a client of a professional employer 
organization, H.R. outsourcing, or if you're not part of a 
trade association or cooperative, why shouldn't you be afforded 
the same opportunity to band together with other employers?
    The one bad apple rule has been a deterrent because 
employers are afraid of what might happen with another rogue 
employer in the plan. I don't believe, and Mr. Campbell can 
probably correct me if I'm wrong, there is any case law that a 
plan has been disqualified because of the one bad apple rule, 
but what it does do, which is unfortunate, is it makes people 
think twice about getting into the arrangement.
    There are plenty of ways to mitigate that risk and to 
protect the others, and that shouldn't be a deterrent for 
retirement security.
    Ms. Blunt Rochester. The other question is based on your 
experience, your current experience with MEPs, how would an 
open one operate? Could you talk a little bit about that?
    Mr. Kais. Sure. Each employer would not have to file their 
own tax filing, first of all, which would be very important, 
there is an overarching tax filing. There is an overarching 
audit. Everything would still be reportable to the different 
agencies for enforcement and for review.
    Each employer would be able to maintain some flexibility in 
terms of developing the contribution formula that meets their 
business needs, meets their employees' needs.
    Also, the best thing about open MEPs or MEPs in general is 
you can set up a mission control tower effectively and design 
the arrangement in a way that promotes automatic enrollment for 
thousands of employers at one time, rather than begging and 
trying to explain the merits to one employer at a time.
    Moreover, you are able to prevent leakage as well. You can 
limit distribution types, loans, there are different things you 
can do, leave the money in the plan, and encourage the highest 
level of savings possible for many employers at one time.
    Ms. Blunt Rochester. Thank you for bringing up our Chamber. 
We have a very, very active State Chamber, and also our local 
Chambers. I know this is something they have been talking about 
for actually decades. It goes back decades, conversations. 
Thank you so much.
    Thank you to the panel, and I yield back the balance of my 
time.
    Chairman Walberg. I thank the gentlelady. Now, I recognize 
the always positive/optimistic gentleman from Georgia, Mr. 
Ferguson.
    Mr. Ferguson. Thank you, Mr. Chairman. Thank you all for 
taking the time to come today and inform us and speak to us.
    The first thing I would like to do is ask Mr. Campbell, 
what do you think is the most significant impact on how the 
fiduciary rule has changed the investment landscape, 
particularly as it relates to small businesses like I operated 
for 25 years?
    Mr. Campbell. I think one of the most significant effects 
of this--just to correct something Dr. Furman had said about my 
previous comments, I didn't say that most of the costs were 
transitional one-time costs. I said in addition to the 
transitional costs, there are real ongoing compliance and 
litigation risk costs, so it is not just a transitional issue.
    All of those costs are resulting in several effects. First 
of all, it's making it less profitable, and it is, of course, a 
profit-making enterprise, to provide financial advice, less 
profitable to serve smaller clients, so that is resulting in 
minimum thresholds increasing, which is reducing access for 
small account balance savers, who are in many ways the people 
who most need assistance in making some financial decisions and 
establishing plans that will result in future savings.
    A lot of the decisions that are being made about how to 
implement the rule are being driven by fear of litigation 
because the BIC exemption, the best interest contract 
exemption, has effectively outsourced enforcement of this to 
the Trial Bar to bring in class actions in state court.
    When you make decisions that are driven by fear of 
litigation, those may not be the optimal decisions that you 
would make if you could otherwise best serve your clients.
    There is a whole host of these types of tradeoffs that are 
having to take place as the industry figures out how to comply.
    Mr. Ferguson. A term in health care, we always called it 
``practicing defensive medicine,'' I guess you are now talking 
about defensive investments?
    Mr. Campbell. Not necessarily investments, but really the 
whole structure of how compensation arrangements are set, what 
products are being offered, which products are no longer being 
offered, which accounts are being served with which levels of 
service.
    There's a variety of different responses that are occurring 
in the industry, but in general, there is definitely a 
disadvantage to small account balances, to small plans, in 
trying to get the level of service they have gotten in the 
past.
    Mr. Ferguson. With the SBA and Office of Advocacy, you all 
did make comments during the public comment period.
    Mr. Campbell. The SBA did make comments. Yes, sir.
    Mr. Ferguson. Typically, when one government agency makes 
comments to another government agency, are those generally 
taken pretty seriously? Has that been your experience?
    Mr. Campbell. That was one of the interesting things about 
the proposal and the comments on it, several entities, not just 
the Small Business Administration, but FINRA as well, went on 
the record to publicly criticize in public comments the 
proposal, which suggests there really hadn't been adequate 
consideration behind closed doors, which frankly is normally 
how Federal entities will address these concerns through the 
OMB review process.
    Mr. Ferguson. Do you have any idea why these were not 
addressed in the final rule?
    Mr. Campbell. Someone had previously discussed the length 
and breadth of the process, how many days the comments period 
were, how many pounds the economic analysis weighs. All of 
those are true. A great deal of work went into this.
    At the end of the day, federal agencies have a tremendous 
amount of discretionary authority, so the policies they pursue, 
if they check the boxes on the process, don't necessarily 
change, despite the amount of time we spend debating them.
    I think this rule is a good example of where the changes 
that should have occurred, many of them did not.
    Mr. Ferguson. Mr. Sossa?
    Mr. Sossa. I'm not speaking on behalf of ERIC, but you 
talked about sort of the defensive investment approach. There 
is a defensive administration component of this. As I stated 
earlier, 85 percent of our population is blue collar. They ask 
us two key questions every time they come into our plan, how 
much do I need to save and where can I put it. We do everything 
we can to answer those two questions.
    We have no issues with the intent of the fiduciary rule, 
the lack of clarity and understanding where we may hit trip 
wires is what's going to cause us and large employers to pull 
back.
    We have billions of assets under management with 
significant compliance risks. The risk of tripping the 
compliance in those areas is going to cause us to try to do 
everything we can to avoid that risk.
    That is really the challenge that we're facing. Again, and 
I feel like I'm repeating myself, it's usually never the intent 
of what is trying to be solved, it is how it's being addressed 
and imposed on employers. We can agree on the problem, let's 
find a solution that works within our area.
    Mr. Ferguson. Mr. Chairman, thank you. I yield back.
    Chairman Walberg. I thank the gentleman. I am now pleased 
to recognize my friend and the ranking member, Mr. Sablan.
    Mr. Sablan. Thank you very much, Mr. Chairman. Dr. Furman, 
do you agree that open MEPs would be as beneficial to 
increasing access to retirement savings as the other witnesses 
claim?
    In your view, are there other solutions that would 
complement or supplement open MEPs, or should be pursued 
instead of open MEPs?
    Mr. Furman. I have not studied the issue in the detail that 
would be required for me to make a confident statement on it. I 
think the goal behind it of reducing costs and giving small 
businesses access to ways to offer savings products to their 
employees is just something I think many businesses want to do, 
and some are deterred from doing by the cost. One would want to 
make sure you continue to protect those employees as they are 
making those savings.
    Mr. Sablan. Thank you. Before I forget, I would like to 
also take my time, Mr. Chairman, to recognize in the gallery a 
young lady, my niece, actually, from the Northern Marianas, who 
is getting real life experience work here in Washington, D.C., 
and hopefully will eventually return home to share what she 
learned here. Carla, welcome.
    Chairman Walberg. We certainly welcome you here, and proud 
to have your uncle here.
    Mr. Sablan. She is actually here staffing for Mr. Sossa. 
Treat her well, Mr. Sossa. Thank you.
    Mr. Kais, I appreciate you noting in your testimony the 
importance of customers achieving a lifetime financial 
security. I am interested in hearing what Transamerica is 
doing, for example, to serve those in remote locations. I know 
you do not have customers in the Northern Marianas. I think you 
do have four or five in Guam, I understand.
    How do you serve Guam where many financial services do not 
operate?
    Mr. Kais. Great question. I used to live in Hawaii, so next 
time I'm in town, we can get together to talk. A great 
question. We work with employers and employees that are remote 
every day, whether it is in the continental mainland of the 
U.S. We do one on one phone calls and support. We fly people 
all over the country to meet with employers and employees.
    I'm not quite sure how many calls we've done to your 
district, but technology allows us to reach a lot of employees. 
We treat small businesses just as we treat our largest clients.
    Mr. Sablan. Thank you for sharing. It could be useful for 
small businesses and workers in the Northern Marianas.
    Mr. Kais. Absolutely. We're delighted to discuss that with 
you.
    Mr. Sablan. Thank you. Let me ask you another question. We 
heard today the difference of opinions from both sides, but 
there is really some things where there is bipartisan support 
to open MEPs.
    Let me ask you, from your testimony I was pleased to learn 
that 89 percent of workers who have access to retirement 
savings plans, like a 401(k), are saving for retirement, but 
only 47 percent of workers who are not offered a workplace 
savings plan are doing so, so it seems to me our goal should be 
to do everything in our power to help encourage more employers 
to offer retirement plans, and as a result, we would appreciate 
the amount of workers saving for retirement.
    Can you help me better understand how open multiple 
employer plans would help address this problem?
    Mr. Kais. I'd be delighted to. Again, three reasons why 
employers don't offer a plan, because they believe it is 
fraught with risk, it's administratively burdensome, and it's 
not cost effective.
    So, by and large, the open multiple employer plan does a 
lot to mitigate the circumstances, making it easier to get into 
the plan. Other things like tax incentives, to put in auto 
enroll, stretch match, things like that would be also helpful.
    Once you are in the plan, you have to cover the employee 
first, once you cover the employee, how do you get them saving 
the maximum amount possible. That is where we all could use 
help.
    Mr. Sablan. Thank you. My time is up, Mr. Chairman.
    Chairman Walberg. I thank the gentleman. I now recognize 
the gentleman from the home of the Masters, Mr. Allen.
    Mr. Allen. Thank you, Mr. Chairman. Thank you for having 
this hearing. As we know, this rule has been discussed quite a 
bit. In fact, in my district, it is hugely unpopular. I do not 
think I have had anyone who has come to me and said please make 
sure that fiduciary rule gets done up there. I think it is 100 
percent against this thing.
    What can this thing do to us? Would it cause a lack of 
access to advice? We talked about litigation, market 
disruption, increased costs to consumers. That is what we are 
talking about here today.
    As a small business owner, I know firsthand how Washington, 
D.C. can affect a business. I was there for 35 years. We got a 
June deadline looming.
    Mr. Campbell, you have already talked about some of the 
real-world ramifications for small business owners and 
industry, and Americans trying to save retirement. In fact, you 
have already mentioned that even though the rule is not a rule 
yet, maybe this is already happening in the investment world 
out there, affecting those who request and require investment 
advice. Is that correct?
    Mr. Campbell. Yes, sir. Unfortunately, you can't just flip 
a switch and get into compliance starting June 8. It takes 
months. In fact, when the fiduciary rule was promulgated, the 
12 months that were given to make the transition was widely 
viewed by folks who were going to actually have to do the 
transition, as being inadequate, that it was an extremely 
accelerated schedule to make the magnitude of the changes 
required by the fiduciary rule. We are already seeing some of 
those changes being put into effect.
    There isn't a single answer in terms of all companies will 
do X. What we're finding is it's a highly individualized 
response, so as a result it has taken many months of effort and 
many millions, actually, billions of dollars, to figure out how 
to begin to comply.
    So, some of the rules' effects have already gone into 
effect in the sense of changing the way accounts are set up, 
sending out notices, closing IRAs to new investment in order to 
fit into this or that provision of this or that exemption. Some 
of that has already occurred in advance of June 9.
    Mr. Allen. Is it creating some of these very problems that 
we have discussed and I think you shared with us?
    Mr. Campbell. It is. Those problems are beginning, but 
obviously once it's fully implemented is when we will see those 
really take off.
    Mr. Allen. Backlash; yes. Mr. Sossa, you had mentioned 
obviously this rule is very problematic for the investment 
agency, and for those who give investment advice, but you 
seemed to indicate that we needed to have a conversation about 
how we currently do business and maybe how down the road some 
changes do need to be made, not this rule, but some changes to 
the way we do business in the investment world. What would be 
your solution?
    Mr. Sossa. I'll answer it in a couple of ways. The 
fiduciary rule of itself again is not something we are having a 
challenge with, it's understanding what the rule is doing and 
how we comply with it. In essence, building the car is not a 
bad idea but if you build a bad car and it breaks down, you 
haven't gotten anywhere.
    From my perspective, from the large employer landscape, 
both on behalf of ERIC and a practitioner, as I said earlier, 
we agree on the intent. What we're looking for is the 
flexibility and the understanding to work with you, what is the 
goal we are trying to solve, what is the problem we're trying 
to solve, 99 percent of the time everything that comes up as 
fiduciary rules, the long-term income disclosure, all are meant 
to draw protection to employees, encourage savings.
    If you look at the large employer market, they probably 
have been doing that for 10 years already, and are doing it in 
ways that are applicable to their employees. We have been doing 
financial education since 2008, recognizing we need our 
employees to retire.
    As you are developing the policies, developing the 
``what's'' as opposed to the ``why's,'' that you engage 
organizations like ERIC, so we can put things together that 
solve the problems. Many times when we get regulations imposed 
on us, we end up doing them twice. We do them once to comply 
with the regulation, and then we do them for real, to solve a 
problem.
    The problem is still the problem. We're just not doing it 
in a way that is effective for our organizations.
    Mr. Allen. Again, the biggest problem I have with this top 
down, one-size-fits-all bureaucratic system up here, they never 
seem to go out and talk to the very folks this is going to 
impact.
    Mr. Sossa. Thank you.
    Mr. Allen. This has to stop. I appreciate your bringing 
that to our attention. Thank you, sir. I yield back.
    Chairman Walberg. I thank the gentleman. Now, I recognize 
the gentleman who patiently has waited today, although he is an 
anxious person to get things done, as we saw yesterday in our 
markup in our full committee. We appreciate your excitement 
with that. I recognize my friend, Mr. Lewis.
    Mr. Lewis. Thank you, Mr. Chairman. I have to say this 
committee's hearings are worth it just for your introductions. 
I do appreciate that.
    I am very, very concerned on where this all is going to 
lead. I want to take a little bit of a 30,000 foot view, if we 
might. The DOL regulation a couple of years ago, in 2015, was 
going to expand the universe of activities that trigger the 
fiduciary rule, primarily what we are talking about, retirement 
service providers in this particular case. If you are an asset-
based structure, that might be problematic. Commission for 
transaction would be problematic.
    There is sort of an elephant in the living room here that I 
want to get to, Secretary Campbell, and that is if we are going 
to go after pay for performance with retirement advisors, why 
would we stop there? What about the fellow that is selling 
automobiles? I was in broadcasting for a number of years, we 
sold radio ads, they got paid on commission.
    If there is a fundamental conflict of interest when I talk 
to my retirement advisor on which mutual funds or which 
particular product is best to buy or how he or she gets paid, 
why would there not be a conflict of interest in every stream 
of commerce?
    Mr. Campbell. Well, actually, I think it's a valid 
criticism to say even if you look at the level fee compensation 
arrangements that DOL is trying to shift everyone to, those 
still have inherent conflicts. I have an incentive to get as 
many assets as I can. I might have an incentive to recommend an 
investment that I think is going to outperform because it 
builds up the assets on which I get compensated.
    You can find a conflict in any of these forms of payment. 
That is why I think if the issue were how do we make sure 
people are giving good advice, how do we give advice that's in 
the best interest, that's one debate.
    This rule is not really about that. This rule is, as you 
point out, is about how do you get paid and being paid is a 
proxy for whether your advice is good or not.
    Mr. Lewis. Someone said earlier, they are doing it because 
they are doing it for pay. I think it was a relatively obscure 
commentator, an economist now, named Adam Smith, that said it 
wasn't for the benevolence of the butcher that the product was 
brought to market, it was in regard to his or her own 
interests.
    That is the nature of our legal system. A defense attorney 
might think their client is guilty but we believe in the 
adversarial system, and we provide them a defense.
    When I go buy a product, the salesperson wants to get the 
highest price, I as the consumer want to get the lowest price. 
I am a competent consumer. I understand that.
    That is why the vast majority of small IRA investors end up 
opting for commission based service. I am a little, as you can 
tell, concerned about where this is going to end in this 
fundamental assumption that most consumers are just plain 
inept.
    Mr. Sossa, on this electronic delivery for disclosures, 
what are the costs associated with having to fill my mailbox 
all the time?
    Mr. Sossa. They are significant. Besides the significant 
part, I'll give you an example. We have almost 100,000 
employees in the U.S. One disclosure mailing, and if it's a 
book, it costs $1.00, that is $100,000 in postage alone. 
Significant cost.
    We pay for it. A lot of employers do pay for them out of 
their plans, so it actually diminishes their accounts over 
time.
    Actually, for large employers, the real value is the 
effectiveness of the communications. I'll give you an example. 
Our hourly plan is really a plan of 400 different retirement 
plan structures. When I have to send out my SBD, one way to do 
that is to send out one SBD with 400 different appendices, 
instead of this massive book for employees to figure out which 
one applies to them.
    If I can do it electronically, I will know who you are, 
I'll know what plan you are in, not only can I send you the 
materials that are particular to you, I can also use that as an 
employee engagement moment, coming back to we do things twice.
    Mr. Lewis. Obviously, only bureaucrats can predict the 
future. What sort of assurances would we have that these 
savings, which could be what, $200 million, $300 million in 
some estimates, would be passed on to the beneficiaries by the 
plan administrator?
    Mr. Sossa. For the companies who charge them to the plans, 
it's automatic. It automatically happens there because they're 
being charged to the plan. For employers like PepsiCo. that pay 
for them, we all work through budgets, and that is my 
communications budget. Now, I have my communications budget, 
and I have lots of communications I really would rather do or 
rather do them in a broader context.
    I'd love to send out their plan SBD and actually have 
information to say by the way, you're not participating in the 
plan, you're not maximizing the match, you've had significant 
loan deferrals. I can now point you to other resources that we 
offer, to encourage savings. We provide free access to 
financial education to all our employees.
    Mr. Lewis. My time is up. I thank the panel for their 
patience today, and I yield back.
    Chairman Walberg. I thank the gentleman. It now gives me 
great pleasure to introduce a very patient individual, the 
gentleman from Michigan, me, for my questioning time. I 
appreciate the panel for being here.
    Mr. Kais, it has been reported that the median savings, 
retirement savings for individuals 55 to 64 is about $104,000, 
and for those 64 to 74, it is $148,000. Incredibly risky to see 
that miniscule level of savings as the median.
    Some have suggested greater access to guaranteed lifetime 
income products, so I would like your thoughts on that, as well 
as what steps you would recommend to the committee in lieu of 
what Mr. Allen said about discussing and talking before we do 
things. What steps you would recommend to help retirees grow 
and safeguard their retirement incomes.
    Mr. Kais. It's a great question, and it's one that we are 
very concerned about as well. We support lifetime income 
products. There's some problems within the industry right now 
making those portable, so if you leave your employer, it's 
difficult to move those lifetime annuities out of the plan to a 
new employer, perhaps. That is something we all need to work 
on.
    We support generally and do provide lifetime income 
information on participants' statements today, we think it is 
important for people to see the number differently, what it 
means, what they are going to have to live on a month by month 
basis. We think that education is important. We need to 
encourage catch up contributions, of course, for folks over age 
50.
    There are a lot of things we can do. I will reiterate that 
automatic enrollment is still very important, and anything we 
can do as a community, public and private, to incentivize 
automatic enrollment is key.
    Chairman Walberg. Okay. Thank you. Mr. Campbell, the 
elephant in the room, and we have talked around it, if DOL does 
not further delay the Obama administration's fiduciary 
regulations, should Congress pursue a legislative fix, and 
should it follow the pattern of what we brought out of the 
House in committee last year with the Affordable Retirement 
Advice Protection Act and the SAVERS Act? Would that be an 
approach to take?
    Mr. Campbell. Well, of course, I'm hopeful that the Trump 
administration will further delay the rule and handle this as a 
regulatory matter. I think the principles in the legislation 
that the House considered last year are very good starting 
points for legislative approaches to dealing with the fiduciary 
issue.
    One of the distinctions that legislation does that the 
original Department of Labor regulation also did was draw a 
distinction between sales activities fully disclosed to sales 
activities and distinct from advice activity. I think that 
would be a useful distinction that the legislation makes, that 
would be something that the Trump administration should 
consider as well.
    Chairman Walberg. Thank you. Mr. Sossa, we have talked 
about H.J. Res. 66, my bill that the President signed 
yesterday. The disparaging comments, I understand. We in no way 
want to discourage experimentation, new ideas, states being 
involved in it as well, and our legislation did not do that.
    Our legislation simply said if you are going to do it, 
there have to be safeguards. ERISA ought to be there like it is 
for everything else. That is what that legislation did.
    Could you please explain why allowing states to impose 
benefit related mandates on employers is dangerous, and 
secondly, how might these perhaps well-intentioned state laws 
be counterproductive for retirement savers?
    Mr. Sossa. Thank you for that question. It is absolutely 
paramount, so the ERISA preemption, not just in retirement, in 
all of our benefit programs, that we as a large employer, a 
multi-state employer, who has employees who live and work in 
different states or live and work in different states at the 
same time, so our ability to provide a uniform retirement 
program, to bring down our leverage purchasing, we can 
purchase, we select our investment choices, we use the leverage 
of large plans to drive down those investment management fees, 
so there is a value we provide there.
    There's a value in communications and how we educate, 
particularly a blue-collar workforce, and how to prepare for 
retirement. Being able to do that with one message across our 
population is paramount.
    If we start to break that apart, and each state starts to 
have a different regulation, employers are going to have to 
either step out of those areas and lose all that leverage, or 
----
    Chairman Walberg. And lose the education opportunities, 
right?
    Mr. Sossa. Lose the education opportunities. Think about 
the administrative costs now for trying to accommodate for 
each--I have a huge sales force who lives in a state but works 
the whole territory, so which rule applies to them? Is it the 
rule they work in, the rule they drive through?
    I'll go even beyond retirement. Some of the paid sick leave 
laws that are coming through now are now varying. Even just to 
administer and track those items are adding significant amounts 
of costs.
    Again, as I said earlier, we all operate on budgets. If 
that cost is being added here, it's going to come out of 
something else. We're adding more to the administrative burden. 
We're adding more to compliance administration. As I said 
earlier and in my written testimony, it adds no value to the 
benefit of the employee, and that's what we're trying to 
preserve with the ERISA exemption.
    Again, allows us to do it in a way that we can do it 
uniform within our organization and knowing our population.
    Chairman Walberg. Thank you. Appreciate the testimony of 
all the witnesses, the responses. This is helpful to us. It has 
been recorded, and this discussion will continue.
    Now, I would like to turn to my friend, the ranking member, 
for any closing remarks you would like to make.
    Mr. Sablan. Thank you very much again, Chairman Walberg. 
Well, there were certainly areas of agreement and disagreement 
expressed among members today. There seemed to be bipartisan 
recognition of the magnitude of the retirement savings crisis 
confronting our country.
    I hope we can work together to find common ground to 
address it and help increase retirement savings opportunities 
for American workers.
    For that to happen, I believe my Congressional Republicans 
and the Trump administration will have to take a much different 
approach than the one they have taken so far. I am hopeful that 
in the weeks and months ahead, Congress can break from that, 
because that is what our constituents and the American people 
expect and deserve from us.
    I hope today's hearing is just the first of several on the 
subject of retirement security. As my colleagues know, we have 
a massive crisis in the multi-employer pension plan system that 
impacts millions of workers and employers. We also must 
responsibly address the solvency of the Pension Benefit 
Guarantee Corporation.
    These are issues that demand the subcommittee's attention. 
Again, I want to thank Chairman Walberg for his courtesy, and 
all the witnesses for taking the time to be here today on such 
an important issue. Thank you very much, and I yield back my 
time.
    Chairman Walberg. I thank the gentleman. Again, I thank you 
as well. This is an important issue, and I think, Mr. Sablan, 
there is some bipartisan agreement and correlation that goes 
on, and we can build on those things. We have seen that happen.
    I think our main desire is to make sure that if someone 
wants to be a big box greeter in their retirement years, that 
is fine, but we do not want to force them to consider that 
because of inadequate planning.
    We also do not want to simply assume that people cannot do 
good things for themselves in planning if they have good 
education. So, where we can foster that opportunity taking 
place in the private sector, in the workplace, with employers 
generally who like their employees and want them to go away in 
retirement years looking back, as my dad looked back on DuPont, 
for instance, and knew my mother was going to be taken care of 
well because of what was put together for him over the years of 
working, that there was a relationship that was developed and 
it has continued on.
    This is something that society has to come together on, and 
we here on this subcommittee and the full committee have the 
opportunity to make historical changes for the better to pick 
up some of the slack that we have let take place, sometimes 
through wrong-headed legislation and regulation, that put 
barriers in the way, and also allowed people to think they 
could not do it on their own, they could not plan, they could 
not ask good questions and find good advisors. I do not believe 
that.
    I think a mix of making a good strong playing field out 
there, finding good partners, giving good incentives and 
opportunities, will bring to fruition something that we 
together can be proud of for the future.
    Yes, thank you for your involvement in this hearing. I 
thank the good showing of my subcommittee, although they have 
all gone on to other places now. This will have an impact.
    Without having any further issues to deal with before the 
committee at this time, we will adjourn.
    [Whereupon, at 11:56 a.m., the subcommittee was adjourned.]

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