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Employee Benefits Security Administration
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November 24, 2014

Assistant Secretary Phyllis C. Borzi

Hello! I'm Phyllis C. Borzi, assistant secretary for the Employee Benefits Security Administration at the U.S. Department of Labor. Thanks for subscribing to my update for consumers and those interested in retirement issues.

This year, we celebrate the fortieth anniversary of the Employee Retirement Income Security Act (ERISA). ERISA was signed into law by President Gerald Ford on Labor Day in 1974, establishing standards for private sector pension and health benefit plans and increasing protections for plan participants and their families.

Some of you will remember that a big impetus for passing ERISA was the closing of the Studebaker Corporation in December 1963 and the resulting loss of pension benefits by its workers.  The misfortunes of Studebaker's employees drew national attention to the importance of pension reform. The danger was clear: Without protection for pensions, workers risked losing the retirement benefits they had earned through years of hard work. The solution was the Employee Retirement Income Security Act of 1974.

The Department of Labor's web team created a terrific web page dedicated to the first 40 years of ERISA. Take a look at the timeline and the historical documents-including President Ford's schedule from September 2, 1974, along with a list of attendees at the signing! You may even want to share some of the neat infographics and visuals developed especially for this commemoration.

While the landscape of retirement, health, and other benefits has changed dramatically in the past 40 years, ERISA remains the cornerstone of employee benefits law. By any measure, ERISA has been an enormous success. While updates and reforms are needed, today the law protects about $7.5 trillion in assets for 141 million workers. That's a huge responsibility and I am proud to run the agency whose employees are dedicated to ensuring you get the benefits you have earned.

Last month, it was a particular treat for Secretary Perez and me to welcome back former leaders of the Employee Benefits Security Administration (formerly the Pension and Welfare Benefits Administration) for a symposium in honor of the fortieth anniversary of ERISA.  Current and former EBSA officials engaged in lively discussions, delivered sometimes provocative observations, and reflected on ERISA's past, present and future.

The archived webcast of the event is available via the links below.

Here's to 40 years of ERISA-and more to come!

View the 40th Anniversary of ERISA symposium Part I
View the 40th Anniversary of ERISA symposium Part II
Learn more about ERISA

Smart Check

CFTC Introduces SmartCheck Tool for Investors

Checking out someone you are considering as a financial adviser can be daunting. One of our sister agencies, the U.S. Commodity Futures Trading Commission (CFTC), has launched a new tool to help. SmartCheck is a campaign that connects investors to tools to check the registration, license and disciplinary history of certain financial professionals.

This collection of tools allows the responsible investor to confirm the credentials of investment professionals, uncover any past disciplinary history, and stay ahead of scam artists with news and alerts.

In addition to CFTC databases, SmartCheck connects you to FINRA's BrokerCheck, the Securities and Exchange Commission EDGAR Database and lists 6 Steps to Smarter Investments.

Check out SmartCheck
FINRA's BrokerCheck
SEC's EDGAR Database
6 Steps to Smarter Investments

Reviewing Your Retirement Plan Fees

Reviewing Your Retirement Plan Fees

Do you know how much you are paying for your workplace retirement plan in fees? If you participate in a 401(k) or similar-type plan, you're probably paying fees relating to the funds in which you invest on top of the administrative fees. These fees affect investment returns and the size of your nest egg at retirement.

Let's take a quick look at how fees can affect you: Assume that you are an employee with 35 years until retirement and a current 401(k) account balance of $25,000. If returns on investments in your account over the next 35 years average 7 percent and fees and expenses reduce your average returns by 0.5 percent, your account balance will grow to $227,000 at retirement, even if there are no further contributions to your account. If fees and expenses are 1.5 percent, however, your account balance will grow to only $163,000. The 1 percent difference in fees and expenses would reduce your account balance at retirement by 28 percent.

One critical step in maximizing the amount of savings that will be available to you when you retire is to pay attention to the fees you are paying. That is why the Department of Labor issued fee disclosure regulations. When that disclosure arrives, open it and take a look. You might be surprised and want to make changes. The Employee Benefits Security Administration has developed a number of resources to help you understand the information you will be receiving and some suggestions of how to use it.

Understanding Your Retirement Plan Fees
Video "A Look at 401(k) Plan Fees"
Publication "A Look at 401(k) Plan Fees"

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