The Pension Assistance Puzzle:
Putting The Pieces Together

Report on the

PENSION ASSISTANCE SUMMIT

Convened on January 24 - 25, 1997 in Washington, D.C. by the Pension Rights Center

Co-Sponsored by the U.S. Administration on Aging U.S. Department of Labor Internal Revenue Service Pension Benefit Guaranty Corporation

Prepared by Heddy F. Reid, Rapporteur

with funding provided by The Retirement Research Foundation and the U.S. Department of Labor

For Release June 16, 1997

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EXECUTIVE SUMMARY

Pensions are crucial to a secure retirement for most Americans. Yet few retirees or their survivors understand the intricacies of pensions. When their retirement security is threatened and people realize that they are not getting the benefits they are entitled to, help can be hard to find. People often do not know where to turn, and for many, there is no place to get effective help.

For two days in January 1997, some 85 people representing 35 agencies and organizations came together from all over the country for a first-ever Pension Assistance Summit. The purpose of the meeting was to identify gaps in pension assistance and pinpoint practical solutions to filling those gaps. Convened at the Mayflower Hotel in Washington, DC, by the Pension Rights Center, the Summit reflected a growing recognition among public and private assistance providers that it is time to work together to solve this critical problem.

Key officials from the U.S. Department of Labor, the Administration on Aging, the White House, the Internal Revenue Service, and the Pension Benefit Guaranty Corporation, as well as industry organizations, professional associations, senior groups, and Administration on Aging-funded pension counseling demonstration projects, attended. The Retirement Research Foundation, the Department of Labor, and the Pension Benefit Guaranty Corporation provided funding for the Summit, and four federal agencies served as co-sponsors. The American Council of Life Insurance, the Institute of Electrical and Electronics Engineers, Inc., and the American Society of Pension Actuaries provided additional support.

The Summit reached a consensus on priorities for short-term measures to improve pension assistance using available resources, and initiated steps to implement its recommendations.

As a result of the Summit:

• Work has begun on creating a pilot public-private regional network of pension assistance services;
• A website has been established to provide information about pension assistance resources, and an electronic mailing list has been set up to allow pension assistance providers to communicate with each other about difficult issues;
• Coordinated lists of resources, including bibliographies of pension information materials and directories of attorneys and actuaries, are being compiled;
• Materials are being collected to assist in the training of volunteer pension counselors, lawyers, and other pension assistance providers;
• Recommendations for specific procedural changes that would make it easier for individuals to pursue their claims have been submitted to the government;
• In addition, the Summit identified long-term initiatives that could help solve pension assistance problems. These included continuing and expanding an existing Administration on Aging-funded pension information and demonstration counseling program, and making selected amendments to the federal pension law, the Employee Retirement Security Act (ERISA), to even the playing field for pension claimants.

The Summit accomplished even more then its most optimistic planners had hoped. The enthusiasm of its participants and their commitment, creativity, and willingness to work hard was evident not only during the conference, but also now as they continue to follow up on their ambitious post-Summit action plans.

THE PROBLEM

Background: Why This? Why Now?

Pensions are crucial for the economic independence of older Americans. This is because social security payments average less than the minimum wage, and most retirees have little in savings. Pensions can make all the difference in the ability of the elderly to keep their homes, put food on the table, and pay their utility bills. Significantly, the income of people who have pensions and social security is typically twice that of people scraping by on social security alone.

Despite the importance of pensions, hundreds of thousands of individuals come to retirement every year only to be told that they will not get the benefits that they had counted on. All too often they have no idea where to turn to find out whether they have been wrongfully deprived of their pensions. The task of tracking down and asserting their pension rights can be overwhelming.

Although Congress has passed numerous laws protecting the pension rights of older Americans, no single government or private agency has been tasked with responsibility for helping people understand or enforce those legal rights. To make matters worse, affordable legal help is very hard to find. Pension law is complex and the amounts involved in a typical pension claim are too small to be of interest to most lawyers in private practice. Poverty lawyers are rarely trained in or knowledgeable about pension law.

But there is good news as well as bad news on the pension assistance front. The good news is that recently there have been real strides made in the struggle to inform people about their pensions. Where there used to be nowhere to go, now more people are getting help with their questions and their problems, thanks in large part to the work of government agencies, notably the U.S. Department of Labor, the Internal Revenue Service, the Pension Benefit Guaranty Corporation, and a Pension Information and Counseling Demonstration Program funded by the Administration on Aging. In addition, private nonprofit and for-profit organizations, and lawyers and actuaries, are providing help to many people.

The bad news is that there is still a long road ahead. Many people aren't aware of the existing services, the information resources are uncoordinated, and major gaps remain. The problem is particularly acute in the private sector, where people are often confronted with a hodgepodge of services that don't meet their particular needs. Additionally, the demands for information far exceed the limited resources of the existing services.

THE RESPONSE

Conference Structure and Conference Participants

Pensions are complicated. The fact that people have trouble getting help in understanding their pension plans, or in resolving pension grievances, is no secret. The challenge is how to address the problem. A high-powered, high-energy group of pension thinkers and doers gathered at the Pension Rights Center's Pension Assistance Summit on January 24 and 25, 1997, to address these issues.

Preparation

To prepare for the Summit, Pension Rights Center staff spent two months collecting data and interviewing a broad cross-section of pension assistance providers to prepare a set of working papers. These papers were distributed to the Summit participants before the meeting. Two of the papers outlined the public and private resources that are available to people needing pension assistance. The third reviewed pension assistance strategies in selected countries abroad. Funds for the preparation and publication of the papers were provided by the Pension Benefit Guaranty Corporation.

Participants

Participants included representatives from 35 agencies and organizations, including the following government offices: the Pension and Welfare Benefits Administration and the Solicitor's Office of the U.S. Department of Labor (DOL); the Internal Revenue Service (IRS); the Pension Benefit Guaranty Corporation (PBGC); the Administration on Aging (AoA); the White House; and the General Accounting Office. In addition, there were representatives from congressional committees and a wide range of industry organizations and professional associations, including the American Council of Life Insurance, the Investment Company Institute, the American Savings Education Council, the American Academy of Actuaries, the American Society of Pension Actuaries, the American Institute of Certified Public Accountants, the American Bar Association, and the Institute of Electrical and Electronics Engineers, Inc.

Also participating were representatives of Administration on Aging-supported pension information and counseling demonstration projects; the Pension Rights Center's National Pension Assistance Project's Lawyers Network; law school clinics; legal services lawyers; law, actuarial, and accounting firms; and labor, women's, and retiree groups. This turnout surpassed all expectations.

Four federal government agencies, DOL, IRS, PBGC, and AoA, agreed to co-sponsor the Summit and to be active participants. In addition, the Deputy Assistant Secretary for Aging and the Assistant Secretary of Labor for Pension and Welfare Benefits gave major addresses to the Summit.

DAY ONE

Keynote Speech

In his remarks opening the two-day Pension Summit, William R. Benson, Deputy Assistant Secretary for Aging, U.S. Department of Health and Human Services, summed up the challenge facing the conference participants, emphasizing that their job would be "to make pension assistance systems more coordinated and more accessible to employees and retirees." Benson noted the existing hodgepodge of places to go for pension information and stressed the fact that government agencies responsible for gathering pension information don't have sufficient staff to give the individual guidance that people with difficult questions require. Because there are few trained people to assist employees, retirees, and surviving spouses in getting information and resolving pension disputes, many people fail to receive benefits they have earned. Pension counseling, he noted, is much more complex than other employee benefits counseling because almost every worker has a different work situation, a different history, and a different pension plan.

A focus of Benson's talk was the success of the demonstration pension assistance program funded by the Administration on Aging under the Older Americans Act. The program included nine regional demonstration projects, with backup support provided by the Pension Rights Center. Benson highlighted the projects' various approaches to giving pension help and outlined the characteristics of a successful program.

First Large Group Working Session

Next, Karen Ferguson, Director of the Pension Rights Center, addressed the Summit, rallying the participants with the cry, "We can solve it! - in two days!" Ferguson emphasized that the Summit's principal focus would be on what can be done in the short term with existing resources, but noted that long-term solutions would be addressed in the final conference session. She encouraged new initiatives, new working arrangements among participants, and called for a free, open, and uninhibited exchange of ideas. Ferguson then introduced Mona Draper, the Summit's lead facilitator, who detailed the ground rules for the meeting. Draper's participation, and that of the three other total quality management facilitators,was arranged by the Institute of Electrical and Electronics Engineers, Inc.

Summit Consultant Karen Friedman described a real Pension Rights Center case, the struggle of Andrew Nunnally who had worked for 28 years in the casket industry under a union-negotiated pension plan but, nonetheless, lacked one month to qualify for a pension. He and his wife had unsuccessfully looked for help for nine years. Karen Ferguson used this example to involve attendees in a dynamic discussion of available services and gaps in current pension assistance programs. Where could Andrew Nunnally have found information and help, and what form could that help have taken? Ferguson asked the group to consider Nunnally's problem in terms of four levels of pension assistance and the help that was currently available at each level. The levels were:

1. Giving general pension information to a client;
2. Helping a client obtain the information needed to evaluate his or her particular problem;
3. Analyzing the components of an individual claim;
4. Representing a client as an advocate.

Suggestions and vigorous responses were offered by representatives from the Labor Department, IRS, AARP's Legal Counsel for the Elderly, and the National Senior Citizens Law Center. It quickly became clear that there were a variety of service providers for the first two levels, but very few for the second two. The Center's Technical Assistance Project Coordinator, Trip Reid, then led discussion of a widow's benefit case presented by California counseling project director Hellene Wenzel. The case studies provoked a lively sense of participation that carried over into the first breakout session.

First Breakout Session - Identifying the Gaps

For the breakout session, participants were divided at random into four groups to work with facilitators to identify the most serious pension assistance gaps. Each group was charged with ranking those gaps that could be closed by short-term solutions. As one participant commented, "Everybody was able to throw out ideas without worrying about value judgments."

Each participant was asked to identity six gaps, write them on yellow post-its, and put them on a wall where the group could see them. Naturally, there was overlap and duplication in the suggestions, but, guided by the facilitators, the groups sorted, organized, and ranked their ideas.

Second Large Group Working Session - Prioritizing the Gaps.

All Summit participants then met in plenary session to consider the gaps identified by the breakout groups and to prioritize the most frequently mentioned issues. The gaps given priority were:

• Lack of knowledge about existing pension resources, insufficient overall resources, and, most important, a shortage of information and advocacy resources.
• Lack of a single point of entry into the system, people with questions and problems don't know whether to call the Labor Department, the Internal Revenue Service, the American Association of Retired Persons, the Pension Rights Center, or other help providers. There is no existing centralized clearinghouse.
• Lack of systematic coordination and referral among existing resources.
• Insufficient effective, fair procedures for resolving disputes. Connected to this were:
  • problems with record-keeping in plans,
  • difficulties in accessing plan documentation,
  • lack of pension plan ombudsmen, and
  • lack of mediation and arbitration.
• Shortage of pension assistance providers, including trained technical backup and legal and actuarial assistance.

Luncheon Speech

Olena Berg, Assistant Secretary of Labor, Pension and Welfare Benefits Administration (PWBA) addressed Summit attendees and representatives of the press at a luncheon hosted by the American Council of Life Insurance. She began by reading from letters, one of which noted, "It seems that most people think the government is their enemy until they need a friend." She then described how the PWBA has increased its emphasis on customer service and reallocated resources to eliminate unnecessary reporting, freeing up funds to directly help people. The three-fold increase in PWBA staff time made available to respond to customer needs has, however, driven up the demand for pension assistance, and the number of inquiries PWBA has responded to has risen dramatically.

In fiscal year 1996, she reported, the PWBA restored $16 million in pension and health insurance benefits to participants, handling 127,000 benefits inquiries, plus responding by automated phone lines to some 40,000 frequently asked questions. Five million copies of pension information publications have been distributed, and the agency has also gotten its message across through public service announcements. "And," noted Berg, "we're just beginning." This year there has been a 45 percent increase in questions answered, and a 30 percent increase in assets restored.

Berg reminded conferees that she was hoping for a wealth of Summit suggestions on how to forge new and creative partnerships leading to better information for plan participants and volunteers, because, as she noted, "success is always going to be grounded in people's perception that they're going to be treated fairly by the system, and that they have redress if necessary."

Second Breakout Session - Identifying Solutions

After lunch, having identified the gaps, the attendees returned to their breakout groups to brainstorm and work to identify solutions. Creativity and off-the-wall thinking were encouraged -- one participant proposed a national pension mascot, "Socks, the Pension Cat," to give a more user-friendly slant to pensions (a suggestion that failed make the final cut). Short-term solutions identified included by participants:

Short-term solutions to lack of existing resources:

• Identify and disseminate list of existing resources.
• Disseminate resource materials to unions, employers, libraries, and information and referral agencies. Use the media where possible.
• Collect materials and train advocates.
• Have a Helpline where advocates can get information.
• Require companies to make benefit statements clear to the average reader.

Short-term solutions to lack of a single point of entry:

• Create a public/private task force to coordinate and integrate the existing network of information providers.
• Use sophisticated technology, such as the Internet and databases, to help people.
• Require pension Summary Plan Descriptions to identify a single point of entry for pension assistance.
• Create a pension question hotline: 1-800-PENSION.
• Have agencies share resources to implement a single point of entry with a caseworker assigned to follow cases through the system.

Short-term solutions to lack of consumer education on pensions:

• Focus on consumer education through "infomercials," agreements with the Ad Council, PSAs. Emphasize the importance of pensions to people's lives. Begin education blitz early; have continuous follow-up.
• Have government agencies publicize their helping capabilities in the media to inform people about where to get help.

Short-term solutions to recruiting more pension advocates:

• Help law schools develop training programs.
• Train non-lawyer advocates.
• Train staff in Area Agencies on Aging to answer common pension questions, since retirees visit such centers frequently to get Medicare/Medicaid information.
• Financial barriers, including:
  • lack of incentives to provide private assistance; shortage of knowledgeable plaintiffs' lawyers, and
  • lack of funding for outreach and counselors.

Third Large Group Session and Reception.

At the end of Summit Day One Mona Draper reviewed the day's proceedings and asked the plenary group to suggest changes for the next day. Participants then relaxed and talked shop at a reception hosted by the American Society of Pension Actuaries.

DAY TWO

Finding Solutions

On Summit Day Two, participants began the work of finding ways to implement solutions for gaps and problems that the working groups had identified. The approach was again creative, and encouraged brainstorming for solutions that would be possible with available financial resources. A large group discussion of alternative ways of implementing the top short-term solutions was followed by breakout sessions to develop implementation plans, and then by a plenary meeting to achieve consensus on implementation plans for short-term solutions.

Morning Session - Short-Term Solutions

The participants voted to choose four short-term solutions that could be initiated by Teams of conference participants following the Summit.

Coordination: The Summit identified the lack of a single point of entry into the pension assistance system as a major pension assistance problem. There are at present many independent and uncoordinated places that a person seeking pension assistance might go. The Coordination Team determined that there should be a single point of entry leading to a regional full-service demonstration private-public network, ideally with an 800 telephone number, so that people needing help could be directed to appropriate sources of assistance.

Outreach: The Summit concluded that people needing help with pension questions or problems do not know where to turn because there is insufficient useful information about pension assistance resources. The Outreach Team decided that an effort to publicize information on people's pension rights, and the available services and resources to assist them, should be initiated. The Team identified broadcast, print, and electronic media as vehicles for an outreach initiative.

Training: The Summit determined that there is a need for training in the field of pension assistance to provide more and better informed advocates. The Training Team decided that a program to identify training needs and resources, encompassing both materials and trainers, would be an important short-term step to fill an existing gap.

Advocacy: Finally, the Summit found that pension participants with a claim for pension benefits often could not find an advocate to help them pursue those claims effectively. The Advocacy Team proposed to expand significantly the help that is available for participants with pension claims. Team members identified taking an inventory of existing resources and recruiting new advocates as feasible short-term goals. They determined to focus on developing an ombudsman program, expanding the plaintiffs' bar, and improving claims procedure regulations and enforcement.

Each team reported its plans of action to the entire group and agreed to maintain the momentum of the Summit by forming a Steering Committee consisting of the four Team leaders and a Steering Committee Chair. The team leaders agreed to take specific first steps to implement their initiatives and report results to the Steering Committee Chair, Ellen Bruce.

Afternoon Large Group Working Session

Solutions From Other Countries. On the afternoon of Day Two, Karen Friedman stimulated Summit thinking about possible long-term approaches to pension assistance by presenting and discussing solutions from other countries, notably England, Australia, and Canada. She highlighted Great Britain's Occupational Pension Advisory Service, where pension consultants volunteer to help individuals with pension questions and problems, and the new British Ombudsman Program. The breakout sessions then reconvened to identify and discuss long-term pension assistance solutions.

Long-Term Pension Assistance Needs. During the afternoon of the second day, the Summit turned to long-term initiatives that could help to solve pension assistance problems. A wide-ranging discussion by the Summit participants identified a list of 48 potentially useful long-term steps. The participants then winnowed down the long-term proposals to five specific initiatives that the Summit concluded merited priority.

The five steps that Summit attendees recommended are as follows:

1. Continue the existing Administration on Aging-funded Pension Information and Counseling Demonstration Program, which features regional projects with a national backup and coordination center, and expand it to all states.
2. Amend the private pension law, the Employee Retirement Income Security Act of 1974 (ERISA), to level the playing field so that pension claimants can expect realistic remedies and their attorneys can obtain appropriate fees.
3. Provide that pension plan documents and records of plans that are terminated or merged are retained in a manner that will make them accessible to plan participants when they retire.
4. Establish a clearinghouse with a single point of entry to help people with questions or problems who are seeking pension assistance.
5. Take additional long-term steps necessary to increase the availability of technical legal and actuarial assistance for individual and their advocates.

SUMMIT CONCLUSION

At the end of the Summit, an evaluation of the conference showed that the participants felt that it had met their highest expectations and been remarkably successful. Participants reported a feeling of satisfaction with a job well done. They developed solid short-term action plans and specific long-term goals, and felt a sense of accomplishment against great odds. As one attendee said, "I liked the emphasis on how to fix things, liked it that we didn't just focus on what's wrong. And now we have concrete things to do next."

POST-SUMMIT ACTIVITIES

Following the Summit, the four teams started working immediately on the four initiatives that had been given top priority in the plenary session.

Coordination Team

The Coordination Team, under the direction of Nancy Wartow, is establishing a pilot public-private regional pension assistance network. The significance of the undertaking is reflected in the wide range of Summit attendees participating. The Coordination Team includes representatives from DOL, PBGC, AoA, the IRS, the American Savings Education Council, the National Center on Retirement Benefits, Inc., the American Institute of Certified Public Accountants, the Gerontology Institute, University of Massachusetts-Boston and the Pension Rights Center.

As originally conceived, the pilot network would have incorporated the Summit's recommendation to use a single point of entry "800" telephone number to provide basic information and referrals to pension plan participants and beneficiaries seeking information or assistance. The pilot network would have been a regional cooperative public-private undertaking that would have been funded in three equal shares from government, industry, and foundations.

After further discussion, the Team decided to refocus its efforts on developing interagency and private sector working agreements to support the Labor Department's pension assistance activities. The pilot network will be implemented in the Washington, D.C. area.

Outreach Team

The Outreach Team undertook to expand significantly pension assistance outreach, with the goal of making plan participants aware of presently available useful information on pension rights and services.

The Outreach Team has made remarkable progress. Outreach Team Coordinator David Baker has created a Summit Coalition web page (http://www2.magicnet.net/benefits/coalition) that includes a "message board" for Summit members to share ideas and information.

The web site is now available for the use of the other teams. This will allow lists of pension assistance resources, including pension attorneys and actuaries as well as bibliographies of useful publications for people with pension questions and people interested in pension counseling, to be put on line.

Equally important, the team has initiated a new electronic "mailing list" for pension assistance providers. The mailing list resembles a bulletin board that allows people advising individuals to share expertise with one another about difficult questions and to resolve troublesome problems. Since many experienced pension professionals and actuaries have subscribed to the mailing list, people faced with thorny legal issues have already successfully used the new mailing list to get help. Questions can be posted by e-mailing pension-help@bolis.com

[Editor's note: you need to subscribe to the mailing list before you can post questions or other messages. To subscribe automatically, send an email to majordomo@bolis.com with the words subscribe pension-help in the body (text) of the message (not the subject line). You will become subscribed to the list later that day, and you will receive confirmation via email. --DRB]

Additional goals of the Outreach team are to share information on pension rights and services with broadcast and electronic media, and with public and private agencies that serve people likely to have questions or need help.

Training

The Training Team, coordinated by Trip Reid, has the goal of identifying steps that could result in more and better informed counselors and advocates for people with pension questions and problems. The team has identified a large number of existing materials that can be effectively used to train both volunteers and non-pension lawyers on how to provide counseling and assistance. The team has also found that there are many people who are qualified and experienced at providing training for either counselors or non-pension lawyers. The team has concluded that steps to make the materials more widely accessible and more user-friendly could be helpful. The team has prepared a preliminary bibliography of training materials and a directory of trainers, and will explore the potential of identifying or recruiting more trainers. Finally, the team is investigating the possibility of developing a pension assistance response software package with frequently asked questions and their responses.

Advocacy

The Advocacy team, coordinated by Norman Stein, focused on short-term measures to improve the advocacy resources available to plan participants with pension problems. The team identified three distinct tracks to follow, and divided into sub-teams to pursue them. The three subcommittees had the following goals, respectively:

1. Expansion of pension counseling. This group is analyzing the participant assistance process from intake (the first response to the client) to presenting a claim, in order to determine what assistance could be effective at each stage of the process, and where there are gaps that need to be filled.

2. Expansion of an effective pension plan participants' bar. This group considered what could be done to expand the number of capable participants' representatives, and to make participants aware of those resources that do exist.

3. Revision of plan claims procedures. This group considered what practical steps could be recommended to overcome procedural obstacles to participants' ability to pursue their claims.

The team has made remarkable progress on each track. The first sub-team, led by Jane Smith, determined that trained volunteer counselors can provide valuable help in the first two stages of a claim, and limited help at the third, the appeal and dispute stage. It therefore recommended that steps be taken to find ways of funding pension counseling projects that use trained volunteers. The group further recommended the exploration of the possibilities of large plans having in-house counselors, and of having plans make regular contributions to finance counseling projects and/or alternative dispute resolution procedures. In addition, Summit participant Bruce Pingree agreed to chair an American Bar Association Alternative Dispute Resolution Committee, and to promote the Advocacy team's goal of developing alternative dispute resolution (ADR) proposals for pension claimants. In another Summit follow-up, Karen Ferguson and David Tseng, Special Assistant to the Assistant Secretary of Labor, asked more than a thousand actuaries at the annual Enrolled Actuaries meeting to consider volunteering to help PWBA field office staff review pension benefit calculations.

Victoria Quesada, the second sub-team leader, has initiated steps to compile a list of attorneys and organizations that can represent plan participants, and to consider ways to implement training programs to prepare additional interested attorneys to represent pension claimants. In connection with these steps, the Gerontology Institute at the University of Massachusetts Boston, the sponsor of the Massachusetts demonstration pension counseling project, has taken over operation of the Pension Rights Center's National Lawyers Network. In addition, Norman Stein, the Advocacy Team Coordinator, proposed the development of a mentor program to the American Bar Association's Joint Committee on Employee Benefits at a March meeting.

Edgar Pauk, the third sub-team leader spearheaded a subcommittee to consider revisions to Department of Labor regulations on claims procedures. The group recommended three specific changes to the regulations that the Department of Labor could take. Each of the changes would improve the internal plan claims procedure process by assuring prompt, orderly disposition of claims disputes, and disclosing to plan participants the reasons for claims denials, so that participants can determine whether their applications for benefits can be cured.

Five months later, the Summit's momentum continues as the agencies, organizations, and individuals it brought together are working constructively to advance dynamic solutions to the pension assistance problem.

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For more information, contact:

Karen Ferguson, Pension Rights Center
918 16th Street, NW Suite 704
Washington, DC 20006
(202) 296-3776