A barrage of proposed or finalized regulation hammered the nation's retirement system in 2010. Over the last year, The U.S. Department of Labor and the Securities and Exchange Commission have proposed or finalized a handful of laws and enforcement initiatives while Congress passed major legislation that, taken together, already are changing the world of investments and retirement planning.
In a phrase, they're all screaming, "Transparency!" Significant rules, regulations and legislation issued include:
On July 21 the Dodd-Frank Wall Street Reform and Consumer Protection Act was signed into law, forcing U.S. public companies to communicate how they are paying their executives, ultimately benefiting investors in the long term and helping public companies establish a healthy dialogue with their shareholders. Companies now will be responsible for disclosing the ratio of CEO pay to median employee pay and correlation between actual performance and compensation.
Clearly, transparency is the mandate and disclosure is the watchword this year. Employers and investors will have more information on what they are paying for, to whom, for what, etc.
These regulatory and legislative changes to investments and retirement planning will enable Americans to begin to think differently about retirement. They'll need to start thinking of retirement as a lifestyle, rather than a destination. Meaning, they'll have to constantly be aware of their investments and retirement finances, they'll have to amend them as they move forward in their life, and they'll have to either do that themselves or find assistance to help them with the process.
Last year, we began to witness a move to force greater awareness, accountability and responsibility of individuals for handling their retirement investing. This year should begin a stronger push in educating Americans about the details of what saving for retirement really means and requires as well as what it really costs.