Michael P. Barry

Is Your DB Plan the Solution to Your DC Retirement Income Problem?: A Dialogue

By Michael P. Barry 12/19/2022

I was on a long cross-country flight with our Director of Benefits, coming back from a meeting with our lawyers in ongoing litigation (yes, over fees) in California. I lost the coin flip – Charlie got the aisle seat and I was sitting in the middle. And sitting next to me, by the window, was a short... READ MORE

Defining the Retirement Crisis, Part 3: It’s Going to Get Worse Before it Will Ever Get Better

By Michael P. Barry 9/19/2022

Recently, we showed how the percentage of retirement savings from a worker’s paycheck required to finance an adequate retirement had — for a worker retiring in 2021 — gone up over 50% vs. the amount of a paycheck a worker retiring in 2000 had to save. In this... READ MORE

‘Good’ vs. ‘Bad’ assets—ESG, PE, Crypto, Part 2

By Michael P. Barry 5/22/2022

Editor’s note: This is the second in a two-part series. The first installment appeared here. In my last column, I argued that when ERISA diversification requirements are met, the only remaining prudence issue is price and that, regarding an asset (e.g., stock in a company) that is traded in a... READ MORE

ESG Good, PE Bad, Crypto Bad, Climate-Focused Annuities Good—Where Does this End?

By Michael P. Barry 4/18/2022

The Biden Department of Labor (DOL) has published a series of pronouncements—revised regulations on ESG, a “Supplemental Statement” on private equity, a Compliance Assistance Release on “Cryptocurrencies,” and a request for information on “Climate-Related Financial Risk”—all raising or “clarifying... READ MORE

Replacing the Employer with the Provider at the Center of the DC System

By Michael P. Barry 3/14/2022

I’d like to start what is likely to be a series of columns on the possibility that we are or may be moving to a provider-based retirement benefit system. What problems might be solved by such a change? And what challenges might be created? I want to begin with a consideration of our current... READ MORE

Presenting the Future: 6 Retirement Policy Challenges

By Michael P. Barry 1/18/2022

As the new year begins, here are the big retirement policy challenges we’re facing, in my view. Note that these are our long-run problems—as opposed to, say, clarifying the rules on ESG investments or for fiduciaries who provide advice. The Challenge of the Transitions We have gone from a Baby... READ MORE

A Very Simple Policy Improvement: Allow QLACs in DB Plans

By Michael P. Barry 12/13/2021

In its 2017 Employee Benefit Survey, the Bureau of Labor Statistics found that 36% of workers in traditional defined benefit plans had an option at normal retirement to take a lump sum benefit, as did 90% of workers in non-traditional DB plans (cash balance and pension equity plans). To understand... READ MORE

Inflation, Retirement Saving and Retirement Income

By Michael P. Barry 11/15/2021

The Consumer Price Index (CPI) has risen steadily throughout 2021, with prices in October 2021 6.2% higher than at the beginning of the year. We have all been pretty much ignoring inflation as a retirement savings/income risk for some time. Understandably, since inflation for the last decade has... READ MORE

The Other Retirement Security Challenge: Long-Term Care

By Michael P. Barry 10/11/2021

The possibility of needing long-term care—basically, needing to live in a nursing home or needing in-home nursing services—is a significant, and largely unpredictable, retirement security challenge. The Employee Benefit Research Institute (EBRI) projects a baseline estimate (assuming no change in... READ MORE

Retirement Policy as Capital Markets Policy, and Capital Markets Policy as Retirement Policy

By Michael P. Barry 9/13/2021

Retirement savings—in an IRA, a 401(k) plan, or a defined benefit plan—is, in the end, a project that involves turning present income, via savings and investment, into future income. As such, it inevitably involves the capital markets. And, indeed, it is often hard to sort out whether any... READ MORE

The Assets-to-Income Challenge

By Michael P. Barry 8/16/2021

In the early 1980s, I worked at a very big company that introduced one of the first 401(k) plans. To give the plan an appealing “brand,” the company called it The Capital Accumulation Plan. I think that is a pretty accurate (and effective) way of describing how a lot of employees, especially the... READ MORE

An Opportunity to Bring Clarity to ERISA Fee Litigation

By Michael P. Barry 7/19/2021

While Hughes involves 403(b) plans, the issues in it are effectively identical to those in the 401(k) fee litigation that has plagued our industry for nearly two decades. On July 2, 2021, the Supreme Court agreed to review Seventh Circuit’s decision affirming dismissal of plaintiffs’ case for... READ MORE

Reassessing TDFs

By Michael P. Barry 6/11/2021

In May, the heads of two key congressional retirement policy committees—Sen. Patty Murray (D-WA), Chair of the Senate Health, Education, Labor & Pensions (HELP) Committee, and Rep. Bobby Scott (D-VA), Chair of the House Committee on Education & Labor Committee—sent a letter to the U.S.... READ MORE

What’s (Really) Driving Interest in Interest Rates?

By Michael P. Barry 5/10/2021

I think interest rates—now at historic lows—are going to remain low (perhaps with some transitory upticks for inflation) for a very long time. And that means that it will be harder, that is, it will cost more, for Americans to retire. Here’s why. The Impact on Retirement(s) Let’s begin with why... READ MORE

Interest Rate Stabilization and DB Funding Relief: It’s a Good Thing

By Michael P. Barry 4/12/2021

On March 11, 2021, President Biden signed into law the American Rescue Plan Act of 2021 (ARPA) which included significant single employer defined benefit plan interest rate stabilization/funding relief. The changes to ERISA DB funding requirements in ARPA were the culmination of a policy project... READ MORE

ERISA Regulation of ESG Investment—a Counter-Theory

By Michael P. Barry 3/8/2021

How do/should we “value” environmental and social governance (ESG) investments? Here’s how the Department of Labor (DOL) summarizes its final ESG regulation: “The amendments [revising ERISA fiduciary rules to restrict ESG investments] require plan fiduciaries to select investments and investment... READ MORE

We Zig and Then We Zag: The Twists and Turns of Fiduciary Status

By Michael P. Barry 2/8/2021

On Dec. 18, 2020, the (Trump) Department of Labor (DOL) released Prohibited Transaction Exemption (PTE) 2020-02, “Improving Investment Advice for Workers & Retirees.” Among other things, PTE 2020-02 radically “reinterpreted” (and broadened) the five-part test under DOL’s 1975 regulation... READ MORE

The Future Has Gotten Way More Expensive

By Michael P. Barry 1/11/2021

Traditional defined benefit plans ended 2020 modestly in the black, after spending most of the year underwater. The story has been a significant decline in interest rates (about 75 basis points) and an increase in liabilities (11%-15%, depending on duration), offset by an increase in asset values—... READ MORE

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Michael P. Barry

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