TESTIMONY OF PHYLLIS C. BORZI
ASSISTANT SECRETARY OF LABOR
EMPLOYEE BENEFITS SECURITY ADMINISTRATION
SPECIAL COMMITTEE ON AGING
UNITED STATES SENATE
June 16, 2010
Good afternoon Chairman Kohl, Ranking Member Corker, and Members of the Committee. Thank you for inviting me to discuss lifetime income streams and the Department of Labor's activities regarding lifetime income options for participants and beneficiaries in retirement plans. I am Phyllis C. Borzi, the Assistant Secretary of Labor for the Employee Benefits Security Administration (EBSA). I am proud to represent the Department, EBSA, and its employees, who work to protect the security of retirement and other employee benefits for America's workers, retirees and their families and to support the growth of our private benefits system. Secretary Solis' overarching vision for the Department is to advance good jobs for everyone. A good job, no matter the type or pay level, includes a pension. EBSA is committed to promoting policies that encourage retirement savings and promote retirement security for American workers.
Many workers are able to achieve retirement security through their employer-sponsored pension plans. Defined benefit pension plans, in particular, are usually designed to provide lifetime income for workers, thereby protecting them against the risk of outliving their assets in retirement. However, as you know, there has been a trend away from sponsorship of defined benefit plans and a dramatic increase in the offering of defined contribution plans such as 401(k) plans, shifting a number of risks for retirement security on to the shoulders of American workers. This trend, combined with increasing life expectancies, significantly increases the risk that retirees will outlive their retirement income.