PLANSPONSOR - February/March 2018 - 2

Insights
Happy 25th!
B
irthdays and anniversaries. We celebrate them annually and, for most, milestone
birthdays and anniversaries are something extra special. This year, at
PLANSPONSOR, we celebrate a milestone-25 years since our debut issue, in
1993. In this current issue, we take a special look back at industry events over that
time. We also will be rolling out exclusive content online throughout this year as we
celebrate our anniversary and our history.
Much has happened in those 25 years, as anyone in the industry throughout them
can attest. While pensions have been declining amid a healthy pension-risk-transfer
market-although the growth in micro and small cash-balance plans continues to
be significant-defined benefit (DB) plans have influenced, and likely will forever,
defined contribution (DC) plans, in investment vehicles and design. The influence
was clear, when we reflected on our first issue-as was how many industry challenges
remain evergreen.
That first issue highlighted themes that can still be seen in our coverage today:
concerns about funding shortfalls at the Pension Benefit Guaranty Corporation
(PBGC); questions as to whether social investing was a prudent investment decision;
discussion of a lawsuit against an insurer; and a focus on investing that stated " no
question is more central to sponsors than whether to assume an active or a passive
investment stance. " Sound familiar?
One major story examined the 401(k) plan, assets of which had more than doubled
over the previous five years to a total $775 billion. Could anyone have predicted that
less than 25 years later-as of September 30, 2017-there would be $7.7 trillion in
all employer-based DC retirement plans, $5.3 trillion just in 401(k) plans? The article
makes clear that the industry was still trying to figure out what these plans would
mean for retirement security, noting, " skeptics think one outcome of the 401(k) trend
will be a divided world in which millions of aging, high-income Baby Boomers live
well off their 401(k) savings, while disgruntled, unproductive workers in their middle
and late 60s cannot afford to retire-but cannot be bailed out or dismissed by their
companies before age 70. "
Alluding to concerns the industry would later address through education, advice
platforms and automatic enrollment solutions were observations such as the following:
" Should 401(k)s and other defined contribution options continue to expand at their
current pace, skeptics hold, seminars and counseling will have to turn neophytes into
savvy investors .... Plan sponsors will have to shoulder a new educational burden for
a set of employees who hold the final decision on investment issues in their hands. "
An issue also garnering attention today was touched upon by Dallas Salisbury,
then executive director of the Employee Benefits Research Institute (EBRI), in
another 1993 story. Lost in the clamor for multiple-choice investing, Salisbury said, is
the reason why pension plans exist in the first place: to ensure that workers can afford
to retire when the company wants to replace them with fresh blood, a challenge many
plan sponsors are currently confronting.
The inaugural issue included a cautionary note that, while " defined contribution
plans are sweeping the nation, " it was " not yet clear whether anyone can save 401(k)
investors from themselves. " We still struggle to answer that question amid lower than
necessary savings rates and asset accumulation. Only time will tell whether we'll still
be asking that question in another 25 years. -Alison Cooke Mintzer, Editor-in-Chief
2 PLANSPONSOR.com February-March 2018
EDITOR-IN-CHIEF: Alison Cooke Mintzer
alison.mintzer@strategic-i.com
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