Bradford P. Campbell believes the transformational changes to 401(k) plans will be his legacy at the Department of Labor.
In an interview Dec. 3 in his tidy, spacious Washington office, he ticked off a list of these changes: auto enrollment; QDIAs, investment advice, disclosure.
Mr. Campbell, assistant secretary of labor and head of the Employee Benefits Security Administration since the Senate confirmed him on Aug. 3, 2007, expects to leave by Jan. 20, when President-elect Barack Obama takes office and a Democratic administration takes over.
No one has called to ask him to stay, he said, chuckling.
He cited Labor Department projections that automatically enrolling participants into qualified default investment options will result in participants gaining as much as a total of $134 billion in retirement savings over 25 years. He said he suspects the number could be higher.
I'm very happy with these regulations, Mr. Campbell said of the QDIAs. He said he made sure the Labor Department didn't pick winners and losers and particular products.
As for investment advice and fee disclosure, Mr. Campbell is waiting for the Office of Management and Budget to release final regulations for both. He expects that one governing fee disclosure by service providers to plan sponsors will be released soon. The rules on advice and disclosure to plan participants have to be done by Jan. 20, he said, noting the OMB usually takes almost the full 90 days it is allowed to release regulations.
The key to regulating fee disclosure is the balance between a voluntary system and the need to protect participants. If you do it in a way that is burdensome, he said, ultimately the participant pays.
To try to maintain that delicate balance, he said the Labor Department didn't, for example, select a business model such as bundled vs. unbundled. All charges or fees paid from plan assets must be broken out, Mr. Campbell said.
Work on the four major changes began in 2003, when he was Ann L. Combs' deputy and they worked on developing what became the Pension Protection Act of 2006, Mr. Campbell said. When Ms. Combs left in October 2006, following passage of the PPA, Mr. Campbell was named acting assistant secretary of labor until his Senate confirmation.
In an interview with Pensions & Investments before she left, Ms. Combs said her successor would have to draft 35 regulations to fully implement the PPA. Of those, about three-quarters are done, Mr. Campbell said. The biggest one left undone: quarterly benefit statements for participants in self-directed plans, although the Labor Department has issued interim guidance.
He noted that during the past two years, we've put out more regulations and major guidance than at any time since the late 1970s (the years following passage of the Employee Retirement Income Security Act).
When asked if he had any disappointments during his tenure, Mr. Campbell cited an association health-care bill. The legislation, which passed the House but not the Senate, would have allowed small businesses across the country to join associations in order to get access to cheaper health insurance coverage through economies of scale.
On the pension side, I don't have any regrets, Mr. Campbell added.
As for where he will work once he leaves the Labor Department, Mr. Campbell said, My wife is one of these people asking, "So what are you going to do next?'
I've not yet figured out what the next step is, he said. He mentioned working for a law firm or financial services company as possibilities.
Regardless of where he hangs his hat, Mr. Campbell said he is proud of what the quality, dedicated Labor Department staff has accomplished. We've done great work, he said.
It's been the greatest job I've ever had.