Celebrating Past Successes and Looking Forward to Future Partnership with the Pension Rights Center on its 48th Anniversary

On October 16, 2024, I had the honor of representing Great Gray Trust Company at the Pension Rights Center’s celebration of its 48th anniversary.? The event brought together members of the Pension Benefit Guaranty Corporation (PBGC) and other government agencies, retirement plan professionals, industry groups, and retirees who have partnered with the Pension Rights Center in advocacy—all in support of the Pension Rights Center’s mission of providing retirement security for all.? Lisa M. Gomez , a keynote speaker at the event, said it well that the American people should know that the Pension Rights Center and its supporters have their backs in helping them earn, and protect, a secure retirement.

For over a decade while at Covington & Burling LLP , I had the privilege of representing the Pension Rights Center pro bono and partnering with them while representing paying clients.? Together, we achieved considerable success in improving the nation’s retirement programs and helping individuals receive and retain their earned retirement benefits.? Two examples are top of mind.

1. Recoupment of Overpayment Legislation?

Working with Karen Ferguson, Stein Norman , Bill Bortz, Karen Friedman , and Richard Shea, I spent over five years developing a proposal with the Pension Rights Center and private sector clients to address the harms when retirement plans sought to recoup overpayments from retirees—successfully culminating in legislation enacted in SECURE 2.0 .? The Pension Rights Center told heartbreaking stories of individuals retiring based on a pension promise (say, to receive $3,000 a month) and then years into their retirement being told that the pension plan made a mistake, that the actual amount owed was less (say, $2,500 a month), that going forward the pension payments would be reduced to the lower amount, and that the difference would need to be repaid with interest.? Even though many had no interest in doing so, private sector pension plans often felt compelled to recover these amounts because of a decades-old IRS position that plans needed to recover overpayments to keep the plans “whole.”

Our work was founded on the insight that this IRS position was wrong—because existing law (the funding rules for defined benefit plans and nonforfeiture rules for defined contribution plans), not recovery of overpayments from retirees, ensures that plans are made whole for overpayments.? Freed from this make-whole requirement, the enacted legislation gives permission to plans to not recover overpayments and implements substantial protections for retirees when plans seek to do so.

2.? Butch Lewis Multiemployer Pension Plan Legislation

I spent six years working in close partnership with the Pension Rights Center to protect the retirement security of the approximately 11 million Americans that have earned a multiemployer plan pension, culminating in the enactment of the Butch Lewis legislation in the American Rescue Plan Act of 2021 .? Early in this work, I attended hearings where affected retirees spoke of the impact of working for 30 years in reliance on a promised pension, retiring, and then facing the prospect of having that pension cut drastically to the PBGC-guaranteed amount of $12,870, or even less, through no fault of their own.? In the years that followed, Karen Friedman and the Pension Rights Center did a phenomenal job in advocacy—among other things, by giving a platform to impacted retirees for them to say in their own words the real-world impact of failing to solve the solvency crisis facing financially troubled multiemployer plans.?

These experiences crystalized the importance of protecting the retirement benefits Americans earn.? I am proud to have partnered with the Pension Rights Center and deployed my multiemployer pension plan expertise in support of a solution that preserved these benefits and strengthened the overall multiemployer pension plan system.

As I look forward to the next chapter of my career at Great Gray, I know that my support for the Pension Rights Center and our shared goals will remain constant.? Like the incredibly talented, dedicated, and selfless staff of the Pension Rights Center, my new colleagues at Great Gray have an overarching focus on providing employees and retirees with the best retirement outcomes possible.?

Great Gray’s business is predicated on providing collective investment trusts (CITs) that offer diversified retirement investment options at a lower relative cost—which is a boon to retirement plan savers because even seemingly small fee savings can boost retirement savings by tens or even hundreds of thousands of dollars over the course of a career.? These cost savings are made possible through operational efficiencies and because CITs are not subject to the cost associated with regulatory requirements imposed on mutual funds by the Securities and Exchange Commission.? Also, CIT management fees can differ among fee classes within the CIT so they tend to be lower, while mutual funds’ management fees are prohibited from having such flexibility.? CITs remain subject to substantial regulation under federal and state banking laws, and, unlike mutual funds, CITs used by private sector retirement plans are subject to ERISA, including its fiduciary and disclosure provisions.?

As I’ve written elsewhere , to tackle current and future retirement challenges, improvements need to be made in (a) access to retirement plans, (b) accumulation of sufficient savings for a secure retirement, and (c) distribution methods and strategies in retirement to address, among other things, the risk of a retiree outliving the individual's savings.? The Pension Rights Center is focused on these challenges as it works in support of its mission of providing Americans with a secure retirement.? Great Gray is helping to meet these challenges today by making available a menu of CITs that can deliver cost savings to retirement plan participants and beneficiaries—and into the future by deploying technology and infrastructure that serve as a platform for retirement security innovation.?

I am proud to support the Pension Rights Center and to work for Great Gray, and I very much look forward to future partnerships.