NATIONAL HARBOR, Md. – There’s very little that’s “defined”about defined contribution plans, leaving employees to their owndevices and too often with little or no money saved for retirement,one of the government’s top retirement and health policy officialssaid Tuesday.

“Had we shifted properly” from defined benefit to definedcontribution retirement plans in the years since the EmployeeRetirement Income Security Act was adopted in 1974, “we’d see moreemployers making defined contributions to their plans,” Mark Iwry,the Treasury Department’s deputy assistant secretary, said.

Iwry’s comments came during a retrospective of ERISA, now in its40^th year, at the American Society of PensionProfessionals and Actuaries annual conference here.

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To its critics, ERISA triggered the decline in defined benefitpension plans, in part by increasing regulatory costs like premiumspaid to support the Pension Benefit Guaranty Corp. But the law waswritten to help protect workers’ pensions, so the decline ofdefined benefit plans was an unintended consequence, as was thewidespread adoption of the 401(k).

Iwry was joined on stage by Alvin Lurie, who served as theassistant IRS commissioner during the years ERISA was crafted.

“It was not foreseen (that as a result of ERISA) 401(k)s andother plans would have taken over," he recounted.

Lurie also told of how the law's supporters scurried topush the legislation through Congress ahead of events thateventually led to President Richard M. Nixon’s impeachment andresignation.

“I think we got a grand compromise, which has worked surprisinglywell,” Lurie said in assessing ERISA four decades after itsbirth.

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Vanguard’s government affairs chief, Ann Combs, who served asthe assistant secretary of Labor for Employee Benefits SecurityAdministration from 2001 to 2006, also sounded a positive noteabout ERISA.

“And on the whole, I think it has held up pretty well,” shesaid.

The “flexibility of the investments (allowed under ERISA) haveallowed (it) to evolve and adapt to new plan structures,” Combssaid. The law’s drafters “were wise to basically adopt the modernportfolio theory that you can invest in riskier assets if they(are) diversified.”

Although he called the law a “job well done,” Iwry was lesssanguine.

“We’ve gone to a contribution that’s up to the employee. It’snot defined,” he said, lamenting the fact that tens of millions ofworkers have no retirement plan whatsoever.

This “shift to undefined benefits,” he said, can be reversed by thewider adoption of automatic enrollment features and longevityannuities in 401(k)s and other defined contribution plans.

Along those very lines, Iwry and his counterparts at the IRSannounced guidelines late last week saying plan sponsors caninclude deferred-income annuities in target-date fundsthat are the default option for workers who don’t select adifferent investment on their own.

Regulators said plans can offer such funds even if they’relimited to employees over a specified age.

“By encouraging the use of income annuities, today’s guidancecan help retirees protect themselves from outliving their savings,”he said in a statement that accompanied the news.

It was a note that he struck once more on stage Tuesday.

“Left to their own devices, without prompts, many won't save,”he said. That’s why, he indicated, government will continue tooffer ways to refine and enhance defined contribution regulationsto help sponsors and workers looking for way to improve retirementsecurity.

“The fact is that we still have such a large percentage of ourpopulation who are not eligible and don’t participate. We need tocorrect that,” Iwry said.

Lurie, meanwhile, helped to finally resolve a minor mystery inthe pension world, to the delight of the audience at Tuesday’smeeting.

According to the “urban legend,” as Lurie put it, the committeethat was formulating the IRA was struggling to come up with anacronym that would be easy for taxpayers to pronounce.

So they settled on an IRS colleague named Ira Cohen.

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