Alicia Munnell
Director, Center for Retirement Research at Boston College

Make Your Employees' Lives Easier

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Alicia Munnell discusses the consequences of the shift from defined benefit to defined contribution plans.

Alicia Munnell

Alicia H. Munnell is the Peter F. Drucker Professor of Management Sciences at Boston College's Carroll School of Management. She also serves as the Director of the Center for Retirement Research at Boston College.

Before joining Boston College in 1997, Alicia Munnell was a Member of the President's Council of Economic Advisers (1995-1997) and Assistant Secretary of the Treasury for Economic Policy (1993-1995). Previously, she spent 20 years at the Federal Reserve Bank of Boston (1973-1993), where she became Senior Vice President and Director of Research in 1984. She has published many articles, authored numerous books, and edited several volumes on tax policy, Social Security, public and private pensions, and productivity.

Munnell was co-founder and first President of the National Academy of Social Insurance and is currently a member of the American Academy of Arts and Sciences, the Institute of Medicine, and the Pension Research Council at Wharton. She is a member of the Board of The Century Foundation, the National Bureau of Economic Research, and the Pension Rights Center. In 2007, she was awarded the International INA Prize for Insurance Sciences by the Italian Academia Nazionale dei Lincei in Rome. In 2009, she received the Robert M. Ball Award for Outstanding Achievements in Social Insurance from the National Academy of Social Insurance.

Munnell earned her B.A. from Wellesley College, an M.A. from Boston University, and her Ph.D. from Harvard University.


Alicia MunnellWith a shift from defined benefit to defined contribution plans more and more responsibility is being placed on the employee, on the worker.  Here are some things you, the employer, could do to make life easier.  One, you could automatically enroll all employees in your plan and do it annually.  That means everybody is in unless they go to the HR department and say they're out.  Second, you can automatically enroll them at a meaningful contribution rate and increase that contribution rate over time.  And third, you have to think about setting it up so that people can take their money out of these plans in an orderly way.  My sense would be that you should have—and employers can't do this without some legislation—but have the default be that some portion of the money is automatically annuitized, again, unless people go to the HR department and say, “I want my whole pile.  I don't want any of the money paid out as an annuity.” 

This is a little more controversial than automatic enrollment, but I think my choice would be to have some annuitization as an automatic part of the de-cumulation process in 401K plans. 

Directed / Produced by Jonathan Fowler & Elizabeth Rodd