1. Proposals to Enhance Retirement Plans Board of Governors January 27, 2015

2. A Proactive Strategy to Enhance Retirement Plans Goal: Develop a topical package of retirement initiatives to:  Preserve and extend benefits of DC system  Protect interests of retirement savers  Shape ideas, improve existing legislative proposals  Forestall harmful policies (Harkin proposal, curtailing tax incentives)  Address growing Capitol Hill interest in revamping, improving DC system Senate Finance Chair Hatch’s “SAVE Act” JANUARY 27, 2015 ENHANCING RETIREMENT PLANS 1

3. Benefits of Proactive Approach Allows ICI to respond quickly, effectively to policymakers  Members of Congress, staff solicit and value ICI input and buy-in Enhances our chances of getting a seat at the table  Those with ideas for improving the system are seen as contributors JANUARY 27, 2015 ENHANCING RETIREMENT PLANS 2

4. Criteria for Selecting Proposals Practical: Bipartisan support, respond to concepts in current bills Impact: Designed to enhance retirement savings Thwart harmful ideas: Parry initiatives that harm DC system or favor specific industries Maintain voluntary system  Build on strengths and successes of current system  Consistent with interests of savers, funds JANUARY 27, 2015 ENHANCING RETIREMENT PLANS 3

5. Proposals Follow Four Broad Themes Expand coverage, participation, and savings Help participants make informed decisions Permit greater flexibility for participants Improve plan administration JANUARY 27, 2015 ENHANCING RETIREMENT PLANS 4

6. Sample Provisions: Expand Coverage Simpler Plan: Addresses perceived coverage gap  Similar to Hatch’s “Starter 401(k)” Targeted Open MEPs  Broadly supported  Needs better targeting to reach small employers, ensure legitimacy of arrangement Nondiscrimination Safe Harbor  Tweaks existing auto-enrollment safe harbor to improves automated savings JANUARY 27, 2015 ENHANCING RETIREMENT PLANS 5

7. Sample Provisions: Informed Decisions E-Delivery: Modernize disclosure practices  Improves savers’ user experience Streamlined Notice Requirements  Allows more effective disclosure Participant Education  Expand IB 96-1 to encourage offering educational resources  Needlessly entangled with DOL fiduciary rule JANUARY 27, 2015 ENHANCING RETIREMENT PLANS 6

8. Sample Provisions: Participant Flexibility, Administration Required Minimum Distributions: Raise RMD age to 75 Hardship Withdrawals: Allow contributions after hardship withdrawal Technical Changes:  Eliminate unnecessary burdens, let plans function more effectively  Broad support, little downside JANUARY 27, 2015 ENHANCING RETIREMENT PLANS 7