DOL ERISA Advisory Council Testimony on Retirement Security

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On July 21, 2009, Matthew Scanlan testified before the U.S. Department of Labor’s ERISA Advisory Council as part of a working group studying approaches to retirement security in the United States. Appearing in his capacity as President and CEO of Renaissance Institutional Management, Scanlan testified jointly with Carter Lyons — his former BGI colleague and co-author of “The Retirement Benefits Crisis” — on the structural advantages of defined-benefit plan design.

Scanlan argued that defined-benefit plans offer the most robust form of retirement security available, for three reasons: professional asset management, reduced costs from the commingling of assets, and the diversification of longevity risk across a large participant pool. He advocated for short-term DB funding relief to allow plan sponsors to maintain their pension commitments through the post-2008 market environment. His testimony included what became a frequently cited formulation of the retirement system’s core misalignment: “Retirement is an income-driven process and we’re living in a lump-sum world.”