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#140 Where Did The Notion Of Pension Consultants Come From?

I feature in a short podcast episode on its origins and current status


My friend and former Russell Investments colleague Josh Cohen is now a Managing Director of the Institutional Relationship Group at PGIM (that’s the asset management arm of American life insurance company Prudential Financial). In his eminent career he has played many roles, including being Chair of the Employee Benefits Research Institute, serving on the Department of Labor’s ERISA Advisory Council, and being Head of Defined Contribution at Russell Investments. Along the way he has met and got to know the major players in the field. And out of all of that experience he got a couple of interesting ideas that are relevant to this blog post. One is that (certainly in the US, but also elsewhere in the world) pension plan sponsors found themselves in their significant legal and administrative roles accidentally, not realizing what they were getting into. Another is that it would be interesting to create a series of podcasts about the events that shaped this situation, and to interview people who played an important part in its origins, evolution and trends.

He called the podcast series The Accidental Plan Sponsor. And for accidental reasons I became one of the people he interviewed. The episode in which I feature was published on August 12, 2021, and it concludes the first season. Here’s the background.


Episode 1 was itself divided into two parts. Part 1 recounted the background, from the impact of world wars, squabbling labor unions, organized crime, and the demise of the Studebaker pension plan, all of which culminated in the Employee Retirement Income Security Act of 1974, or ERISA as it has come to be known. In part 2 Josh interviewed Frank Cummings, who was then beginning his 70-year law career, with Studebaker as a client. Frank and Senator Jacob Javits did a series of road shows centered on stories of people losing their entire pension – which in turn led to the passage of ERISA.

Episode 2 features an interview with Ted Benna, the father of the US 401(k) plan, which has come to dominate the defined contribution (DC) scene.

How has the system fared? Episode 3 jumps ahead to the current day, and includes evaluations from Lori Lucas (President and CEO of the Employee Benefits Research Institute) and Lew Minsky (President and CEO of the DC Institutional Investment Association) on four crucial factors of success: access, adequacy, alignment and innovation.

Lori and Lew consider innovation to be lacking. So in Episode 4 Josh interviewed the inhouse leaders at Intel and International Paper, both known for DC innovation.

From there the scene shifts to what influenced the current shape of DC plans.

Episode 5 starred Brigitte Madrian, who pioneered the behavioral economics work on which automatic enrolment is based, and Larry Tint, who created the target date fund concept. These are two aspects that underlie the operation of modern DC plans and have enabled them to achieve as much as they do.

Regulation, litigation and consultants have all also played major roles.

So Episode 6 focuses on the carrots and sticks that come with regulation, featuring two former directors, Brad Campbell and Phyllis Borzi, of the Department of Labor’s Employee Benefits Security Administration.

And Episode 7 looks at the impact of class action lawsuits on the retirement system, interviewing Jerry Schlichter and Jamie Fleckner, who have participated in lawsuits from opposite perspectives, one representing plan sponsors and their providers, the other representing employees who feel they have been wronged.

Back to the accidental plan sponsor, the collective group that never ever imagined they would have to live through all these complications. Who helped them? Why … consultants, of course!

And that’s Episode 8 (“In consultants we trust”), in which I appear accidentally. Why accidentally? Because the first pension consulting relationship was when the JC Penney Company hired George Russell as its consultant. I wasn’t there at the time. But of all the people who played a subsequent significant role at Russell and had worked with George in the relatively early Russell days, Josh reached out to me to give him the relevant history.

So I re-read George’s book Success by Ten, and had long chats with Jan Twardowski (who started Russell’s international division, and along the way hired me) and Mike Phillips (with whom I worked closely in consulting and who succeeded George as CEO). And I nervously awaited the interview with Josh – which of course he conducted in a way that put me entirely at ease.

If I’m a stand-in for George at the start of the pension investment consulting era, it makes sense that someone from Mercer should feature to describe where consulting is today. And that’s Rich Nuzum, the president of Mercer’s Investments and Retirement business. I didn’t know it would be Rich, and I’m delighted to share the podium with him, because I know him and he’s a great and good guy – and in fact a few years ago we appeared together on a panel at a World Pension Summit conference.

(And in fact I know many of the people Josh interviewed for this first season of The Accidental Plan Sponsor. As they say in Disney World: it’s a small world, after all.)

All in all, this series is compelling listening, particularly for those of us who have a connection with the retirement system. (One email about Episode 8 that is going the rounds starts off: “This was freaking AWESOME. I may be biased, but this podcast drew me in and held my attention throughout.”) And though the episodes deal with the US, I can testify that they’re of great interest in other countries too – I know, I was lucky to have a career that took me to many countries, and in all of them you’ll find aspects with a lot in common with the US.

As you can guess, Josh’s interviews were far longer than the extracts he used in his short podcasts (typically half an hour long), and the personal stories he encountered along the way were too good not to air. Josh’s solution is to create bonus episodes, featuring these anecdotes, along with PGIM colleagues and other industry experts, like Mike Barry. It’s possible some other stories I told might get there too. (My anecdote about my talk on “Sex and Actuarial Principles” made the cut for Episode 8, though!)

Regardless, given all the background prep I did for the interview, I’m going to write a future blog post about some of the people who influenced my early days at Russell, since my time there turned out to be such a wonderful part of my life.

I’ve had great enjoyment from the series. I hope you’ll enjoy it too. And I’m eagerly looking forward to what Josh comes up with as he surveys the world in the second season in 2022.


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I have written about retirement planning before and some of that material also relates to topics or issues that are being discussed here. Where relevant I draw on material from three sources: The Retirement Plan Solution (co-authored with Bob Collie and Matt Smith, published by John Wiley & Sons, Inc., 2009), my foreword to Someday Rich (by Timothy Noonan and Matt Smith, also published by Wiley, 2012), and my occasional column The Art of Investment in the FT Money supplement of The Financial Times, published in the UK. I am grateful to the other authors and to The Financial Times for permission to use the material here.

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