Ferrigno ready to climb new heights

After 16 years fighting mostly uphill battles over retirement regulation and legislation, Edward Ferrigno is looking forward to scaling some actual mountains when he retires March 31 as vice president of Washington affairs for the Plan Sponsor Council of America.

As he and his wife, Deborah, prepare to move to Boulder, Colo., the plan is to spend time hiking in the Rocky Mountains. “I'm looking forward to disengaging from the Washington scene,” said Mr. Ferrigno in an interview.

The question is what Washington will do without him. “Ed has been a central figure in the retirement policy community, and he truly will be missed,” said Judy Miller, director of retirement policy for the American Society of Pension Professionals and Actuaries.

“All of us owe a good deal of thanks to Ed. More than any other person, he is responsible for putting in place a rational system of rules and regulations that have permitted (the retirement system) to prosper,” said David Wray, retired PSCA president. With a retirement system that now represents trillions in savings, “he should feel very satisfied that he has made a significant contribution to the workers of America.”

It was a pivotal time for pensions when Mr. Ferrigno started at the PSCA in 1998. “In 1998, we were still trying to convince people that 401(k)s were a viable alternative to defined benefit,” he said.

Mr. Ferrigno said he has seen a marked change on Capitol Hill as legislators and their staffs come to appreciate defined contribution plans, which can “put more money in people's hands,” particularly those without access to workplace defined benefit plans. Still, he said, “every single day for some ridiculous reason we have to defend the 401(k) system.”

One thing he would like to change is the general media's understanding of retirement issues. “They decide the story before they write it. They like the story that the system is a failure. I think the general media does a very poor job. I think you should thank God that you have good plan sponsors looking out for participants.”

He notes that the role of the plan sponsor has changed in the last three decades or so, as services have been outsourced. Larger sponsors “are still very interested in the product being branded. As you go down market, the more the product is identified with the service provider, by and large they spend a lot of time keeping unsophisticated plan sponsors out of trouble,” he said.

He called distribution products “the next great challenge.” “The legacy to the defined contribution system is the ability to innovate” he said, pointing to auto enrollment and target-date funds. “We have the ability to experiment. It's a continually improving system. It's one of the great American success stories by far. Companies don't have to do this, and thank God they do.”

Mr. Ferrigno welcomes the Washington debate about fees and fee disclosure to plan executives and participants. “It sensitized the plan sponsors. They are scrubbing more and more. A lot are getting away from revenue-sharing and moving toward flat fees. I think plan sponsors need to put their purchasing agents' hats on more often.”

What would PSCA members like? “Give us a piece of paper that shows us what the fees are,” he said.

Mr. Ferrigno also backs the Department of Labor's effort to tighten up the definition of a fiduciary: “We think the DOL is taking the right approach. The sooner the service provider finds a solution, the better off we are all going to be.”

On Capitol Hill, one of the biggest concerns among lawmakers is with rollovers: “They don't want people to be misled.”

Many Washington retirement players credit Mr. Ferrigno with playing a central role in promoting auto enrollment, qualified default investment alternatives and higher plan contribution limits. He is also proud that “we were able to bring sanity” to the debate of employer stock in defined contribution plans, a practice cast in a bad light following the Enron Corp. “inferno,” he said.

One of his biggest coups came in 2006 when the Pension Protection Act was taking shape; it included auto enrollment and what Mr. Ferrigno described as “75 other provisions that made it easier to run plans.”

One of the biggest challenges for lobbyists of all kinds was trying to save temporary tax provisions enacted in 2001 that were about to expire. At the end of it all, “the retirement provisions were the only ones made permanent, and Ed made that happen,” said Mr. Wray. “I still don't know how he did that.”

His biggest regret was not being able to persuade Congress that tribal nations had the right to have governmental retirement plans. Instead, he said, “we came out much worse, with much more stringent rules.”

The secret to Mr. Ferrigno's sizable accomplishments is his character, say his many fans. Their favorite words to describe him are commitment, integrity and perseverance. For Mr. Wray, there was also “the assumption that anything is possible, if you let other people take the credit. He never tooted his own horn.”

“He was always truthful and he told it like it was. He was successful because people really respected him. He stood out,” said Mr. Wray.

“Ed is one of the people you can always call when you want to know anything. He always had an ear to the ground,” said Aliya Wong, executive director of retirement policy for the U.S. Chamber of Commerce, who considers him “a great mentor in terms of managing politics and personalities, as well as the substance of the issue. I still can't believe he is retiring.”

Michael Davis, a former Labor Department official now director of institutional client relationships with Calvert Investments in Bethesda, Md., said, “I loved working with Ed. You always knew he was going to be insightful, work toward the betterment of retirement plan participants nationwide and do so with integrity.” n