Ron Gebhardtsbauer, senior pension fellow at the American Academy of Actuaries in Washington, is all for people power.
Employers should give workers more and better information about changes in their pension plans, he told members of the ERISA Advisory Council May 6.
Mr. Gebhardtsbauer, testifying before the council's working group on cash balance plans, said employers need to give employees more useful information when changing their pension plans, not just when traditional defined benefit plans are converted into cash balance plans.
Explaining the financial impact of pension changes is key, he said, especially if a change could result in a reduction in future benefits. Employers could give the information only to the employees who will be affected by the pension plan changes, or give them sample benefits for hypothetical employees.
"In either case, employees could ask for more examples or be provided relevant information about their specific situation," he said.
Meanwhile, the ERISA Advisory Council's working group on cash balance plans itself is considering recommending that workers get more information when employers make this switch, said Barbara Ann Uberti, head of the council and division manager of employee benefit trusts and corporate financial services at the Wilmington Trust Co., Wilmington, Del. The council will present its recommendations to the Labor Secretary in November.
