In “PPA has major impact on defined contribution plans,” Pensions & Investments turned to benefits and executive compensation partner Brad Campbell to discuss the significance of the Pension Protection Act (PPA), which was signed into law 15 years ago, and his time at the Employee Benefits Security Administration (EBSA).
Campbell was the deputy assistant secretary of labor for the EBSA in 2006, the year the PPA was signed into law, and later led the department when it promulgated regulation establishing qualified default investment alternatives (QDIAs). Campbell, who was part of the George W. Bush administration’s PPA negotiating team, said establishing QDIAs was the most important issue he was a part of while in government.
QDIAs, coupled with more auto enrollment and auto escalation, had a major impact, Campbell added. “People know they need to save for retirement; they just weren’t sure always what to do and how to do it,” he said. “And having those decisions made for them has really made a big difference in terms of how many people are participating and how much they’re saving.”
Both Democrats and Republicans are now comfortable with a “soft” automatic enrollment where it is only required in certain situations such as when a new plan is started – similar to what is proposed in the House bill –Campbell said, adding that in 2006, Republicans were hesitant to go forward with any such mandates.