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Study: Confidence Higher Among Target Date Fund Investors

Thu, 09 Apr 2026 19:43:49 GMT

A new survey by Voya Investment Management finds that participants who invest in target date funds (TDFs) feel significantly more confident about their retirement savings than their peers who are not invested in TDFs. When asked whether investing in a TDF makes them feel more confident about making good investment decisions, 95% of employed TDF investors said yes, including 39% who strongly agreed. Among those who don’t invest in TDFs, total agreement dropped to 75%, with only 14% strongly agreeing.

The survey found that 71% of employed TDF investors said they feel confident that they’ll reach their retirement goals, compared to 58% of non-TDF investors. Employed TDF investors also report less stress — more than 90% said that investing in a TDF helps reduce the stress of retirement planning. Among those who don’t use TDFs, 73% said the same.

Among participants with access to a TDF, 83% of employees and 86% of retirees reported that they chose to invest in it. The top reasons offered for their TDF investment decision include: professional management, ease of use, built-in diversification, and ongoing rebalancing.

Sources:

How Are Plan Sponsors Measuring Participant Success?

Thu, 26 Mar 2026 19:50:29 GMT

The ultimate proof of retirement plan participant success is in the results: whether the participant achieves a financially secure retirement. In the meantime, plan sponsors can look at a variety of metrics to help evaluate and track plan outcomes. The 2025 PLANSPONSOR Defined Contribution Survey identified several of these metrics, summarized below. While not exhaustive, this overview illustrates the range of lenses sponsors use to gauge employee financial wellness and retirement readiness, beyond analysis of plan lineup investment options and performance.

Plan Participation & Contribution Behaviors. Participation and savings patterns offer insight into how employees are engaging with their plan and whether contribution behaviors are supporting long-term savings goals.

• Plan Participation Rate: Percentage of eligible employees actively contributing to the plan.
• Average Deferral Rate: Average percentage of compensation deferred by participants.
• Employer Match Utilization Rate: Percentage of participants contributing enough to receive the full employer match.

Auto-feature Effectiveness. These are metrics tied to automatic plan features and their influence on participant behavior over time, including retention, savings progression, and inertia effects.

• Automatic Enrollment Capture Rate: Percentage of automatically enrolled participants who remain in the plan.
• Automatic Enrollment Opt-out Rate: Percentage of automatically enrolled participants who decline participation.
• Automatic Escalation Success Rate: Percentage of participants whose contribution rates increase as scheduled.

Participant Engagement. Engagement metrics provide insight into whether and how participants are interacting with plan resources, tools, and support channels.

• Participant Registration Rate: Percentage of participants registered for online plan access.
• Online Engagement Rate: Frequency of participant interaction with plan websites, tools, or planning resources.
• Call Center Volume and Participant Inquiry Patterns: Frequency and subject matter of participant inquiries to plan service centers.

Financial Wellness and Stress Indicators. These metrics offer context around participants’ broader financial health, highlighting behaviors that may affect long-term savings.

• Financial Education Engagement Rate: Participation in advisory sessions or group education programs.
• Loan and Hardship Withdrawal Rate: Percentage of participants taking plan loans or hardship distributions.

From Metrics to Meaning

Plan sponsors have lots of data at their disposal to evaluate plan success. Working with an advisor can help sponsors identify the most relevant data points to track, interpret results in context, and emphasize progress over time rather than relying solely on snapshot comparisons or industry averages — all while remaining aligned with the plan’s overall goals.

Sources: https://www.plansponsor.com/surveys/2026-dc-survey-plan-benchmarking/

401 (k) Check-ins Can Help You Stay on Track

Tue, 17 Mar 2026 19:51:54 GMT

In many ways, saving through your employer-sponsored retirement plan has never been more convenient. Automatic enrollment, auto-escalating contributions, and target date funds can make saving feel almost effortless by quietly adjusting your contributions and investments over time.

While automatic features remain powerful allies in your savings strategy, you may also want to ensure your overall approach to retirement savings reflects any significant life events, like marriage, kids, job and income changes, and shifting financial priorities. Below are some ideas to consider for keeping your savings strategy aligned with your goals as life changes happen.

Increase your contributions as your earnings rise. Increase your contribution rate to reflect raises and bonuses, so your long-term savings potential keeps pace with your earnings.
Reassess your savings rate as you pay down debt. As credit card balances, personal loans, student debt, or other monthly obligations decline, you may gain added flexibility to increase retirement plan contributions.
Contribute enough to maximize your match. If you haven’t reviewed your elections in a while, you could be leaving part of an employer match on the table.
Revisit beneficiary designations after major life events. If you experience changes in your marital status, dependents, or other personal circumstances, you may want to adjust your beneficiary elections.
Take advantage of catch-up opportunities. For the 2026 tax year, participants aged 50 and older can contribute an additional $8,000 above the standard limit, with higher catch-up amounts — up to $11,250 — available for participants aged 60-63, subject to IRS limits and plan provisions.

Retirement planning is a long game, and even small misalignments can compound over time and meaningfully affect your retirement readiness. Decisions made in the final years leading up to retirement can be especially important with less time to course correct.

Periodic plan check-ins can go a long way toward keeping your savings strategy aligned with the realities of your life. Even if you’re using a target date fund or your plan’s automatic features, taking the time for quarterly or annual reviews can help you stay on track toward meeting your retirement goals.

Source: https://www.psca.org/news/psca-news/2025/6/automatic-features-have-tripled-in-use-since-2007

IRS Issues New Guidance on Plan Distribution Safe Harbors

Thu, 19 Feb 2026 14:39:34 GMT

When employees leave an organization, they face an important decision about their retirement savings. Do they leave them in their former employer’s plan? Roll them into an IRA or into their new employer’s plan? Or cash out? The decision a participant makes can have a lasting impact on their retirement savings trajectory.

Many participants, however, don’t fully understand their distribution options or the associated tax consequences. A 2024 Government Accountability Office (GAO) report found that more than half of participants surveyed didn’t know they could leave their savings in a former employer’s plan, and only 38% indicated they understood the tax implications of indirect rollovers.

The IRS recently issued a guidance document aimed at helping sponsors shepherd participants through this process. IRS Notice 2026-13 provides safe harbor language sponsors can use to deliver certain written explanations to eligible participants about distribution options required under IRC Section 402(f).

What Happens When a Participant Departs?

When participants leave their jobs, they generally have four options for their 401(k) and other workplace defined contribution retirement plan account balances:
Leave the assets in their former employer’s plan
Roll them into a plan sponsored by their new employer
Roll them into an IRA
Cash out via a lump-sum distribution

The first three options preserve the tax-advantaged status of retirement savings, allowing assets to continue growing under applicable tax rules. With the fourth option, however, participants may owe income taxes on the taxable portion of the distribution and may be subject to an additional 10% early distribution penalty if the participant is under age 59½.

Among the first three options, the decision to keep assets in a former employer’s plan versus rolling them over can be a consequential financial choice, given potential differences in fees, investment options, and other characteristics of the former employer plan, the new employer plan, and an IRA.

The Safe Harbor Guidance

In the 2024 report, the GAO recommended that Section 402(f) notices provide clearer and more concise information about the four distribution options and their associated tax consequences. The report also included recommendations for the timing of these disclosures.

In response, the IRS issued Notice 2026-13, which updates and clarifies the safe harbor explanations under Section 402(f). The revised guidance aims to help plan administrators meet the written notification requirement in light of recent statutory changes.

The notice includes two separate safe harbor explanations: one for Roth accounts and one for non-Roth accounts. Both meet the requirements of Section 402(f) for an eligible rollover distribution if they’re provided to the recipient within a “reasonable period of time” (as defined in regulations) before the distribution is made.

The guidance also addresses changes to the law, including updates related to:

The 10% additional tax on early withdrawals from retirement plans
Required minimum distribution rules for surviving spouses

The increased age for determining dates for beginning required minimum distributions

Next Steps for Plan Sponsors

Sponsors can use the safe harbor language to meet Section 402(f) requirements when providing departed participants with an explanation of their distribution options. The language may be customized based on plan design, provided the modifications don’t affect the substantive requirements of the safe harbor explanation. For example, plans without after-tax employee contribution options may remove that portion of the language.

The new safe harbors, however, may have a limited shelf life. The IRS is already anticipating updates to reflect future changes, including provisions of the SECURE 2.0 Act that become effective for taxable years beginning after December 31, 2026. Also, the updated explanations will not satisfy Section 402(f) to the extent the explanations are no longer accurate if there are changes in relevant law occurring after January 15, 2026.

Increase your contributions as your earnings rise. Increase your contribution rate to reflect raises and bonuses, so your long-term savings potential keeps pace with your earnings.
Reassess your savings rate as you pay down debt. As credit card balances, personal loans, student debt, or other monthly obligations decline, you may gain added flexibility to increase retirement plan contributions.
Contribute enough to maximize your match. If you haven’t reviewed your elections in a while, you could be leaving part of an employer match on the table.
Revisit beneficiary designations after major life events. If you experience changes in your marital status, dependents, or other personal circumstances, you may want to adjust your beneficiary elections.
Take advantage of catch-up opportunities. For the 2026 tax year, participants aged 50 and older can contribute an additional $8,000 above the standard limit, with higher catch-up amounts — up to $11,250 — available for participants aged 60-63, subject to IRS limits and plan provisions.

Sources:

https://www.irs.gov/newsroom/treasury-irs-provide-new-safe-harbor-explanations-for-retirement-plan-administrators  

https://www.irs.gov/pub/irs-drop/n-26-13.pdf

https://www.irs.gov/irb/2026-06_IRB

https://www.gao.gov/products/gao-24-107167

Employer-Supported Emergency Savings Features: Plan Sponsor Considerations

Tue, 10 Feb 2026 19:40:46 GMT

Employees, particularly those early in their careers, are worried about their ability to handle major, unexpected expenses. According to a new CAPTRUST report, emergency savings is the top financial concern for workers aged 18-30 and ranks among the top three worries for older employees.

For employers, this finding highlights a broader business challenge, as employees’ financial stress can affect productivity.

Employees Uneasy as Preparedness Lags

According to research by Empower, 50% of American workers admit they’re stressed about their current level of emergency savings. Additionally:

32% have no emergency savings
64% say building emergency savings is a top financial priority

52% regret not starting an emergency fund sooner

Empower also found that 29% of Americans say they can’t afford an unexpected expense of more than $400. While financial experts often recommend that individuals set aside an amount of emergency savings equal to six months of their salary, many U.S. adults fall well short of that benchmark. The Empower study found that median emergency savings across all Americans is just $500, with amounts varying by generation:
• Gen Z: $400
• Millennials: $300
• Gen X: $500
• Baby Boomers: $2,000

What Does This Mean for Employers?
According to the CAPTRUST study, three quarters of employees say that financial concerns affect their motivation at work, and 62% report experiencing moderate to severe stress that impacts their productivity and overall wellbeing.

According to a November 2025 report by Fidelity, employee financial stress costs employers $183 billion annually in lost productivity.

Emergency Savings Benefits
401(k)s and other workplace defined contribution plans can play a role in helping provide emergency savings, though using assets set aside for retirement savings has tradeoffs – namely, money taken from the plan will not compound over time to support a retirement nest egg.

According to an Employee Benefit Research Institute (EBRI) survey, 77% of responding firms offer or plan to offer emergency savings benefits in the next year or two. The most common emergency savings benefit is the ability to take loans from a 401(k) plan, made available by 56% of employers. While 21% allow up to $1,000 in penalty-free withdrawals for personal and financial emergencies from retirement accounts (a new plan feature option enacted in SECURE 2.0 effective in 2024), another 43% indicated they planned to implement this benefit within the next year or two.

Additionally, SECURE 2.0 allows eligible non-highly compensated employees as defined by the IRS to open pension-linked emergency savings accounts (PLESAs) as part of their retirement plan. PLESA balances can reach up to $2,500 and are funded with after-tax (Roth) contributions, enabling participants to withdraw funds early without being subject to the 10% early distribution penalty.

What Else Can Plan Sponsors Consider Doing?
While doing so would likely come at a cost, employers could consider leveraging retirement plan advisors to better support workers’ financial preparedness. Nearly all employee respondents to CAPTRUST’s survey (98%) said they would use an advisor if one were offered at no cost, and 40% identified one-on-one advice as the most helpful tool for easing their financial concerns.

Tailoring financial content and support by career stage also may help reduce stress levels. For example, early-career employees report the highest levels of mental and physical impact from financial stress, so they may require a different level of support than their older colleagues.

Participant Corner: Sticky Saving Goals to Suit Your Personality

Mon, 02 Feb 2026 17:07:27 GMT

The start of a new year is a natural time to set fresh financial resolutions, but unfortunately most don’t last past February. One reason may be that our money goals often don’t align with the way we naturally think or how we stay motivated once the initial enthusiasm fades.

A study of more than 2,400 individuals published by American Psychologist found that people tend to save more successfully when their savings goals fit their personality — specifically their “Big Five” personality traits. Here’s how higher levels of these traits may influence everyday saving behavior…

Openness: You’re creative, future-minded, and receptive to new experiences. Goals tied to inspiration, growth, or meaningful exploration may feel more motivating. If this sounds like you, saving for retirement abroad, travel, or a hobby you’ve always wanted to try may help you keep your saving plan on track.
Conscientiousness: You like plans, order, and follow-through. Practical, clearly defined goals (e.g., methodically paying down a credit card balance or making extra mortgage payments) might appeal to your disciplined nature.
Extraversion: You gain energy from people and social interactions. Goals connected to shared experiences or exciting future plans that involve others — such as organizing a family reunion, group travel, or saving to move to an active retirement community — may help keep you on course.
Agreeableness: You’re driven by connection, cooperation, and concern for others. Financial goals that benefit loved ones or reflect shared values, such as creating a legacy trust for future generations or prioritizing charitable giving, may feel more purposeful and motivating.
Neuroticism: While this word may feel like something you’d hear in a Woody Allen movie, neuroticism is simply a measure of sensitivity to stress and negative emotions. So, goals that ease worry and create a sense of security, calm, or safety — such as building a rainy-day fund or reducing debt — might be particularly effective for you.

Saver, Know Thyself

Even without taking a formal personality test, you can still consider which traits feel like a match and choose goals with those tendencies in mind to achieve what the researchers called “person-goal fit.” Ask yourself: “Am I drawn more to new experiences, regimented plans and checklists, energizing social interactions, supporting others, or easing financial anxiety?”

Ultimately, your likelihood of sticking with a financial goal often depends on what it truly means to you. What motivates one person may barely register for someone else. When your savings goals fit your personality, you may be surprised at how much easier the follow-through becomes.

Sources:
https://www.apa.org/pubs/journals/releases/amp-amp0001128.pdf

Household Spending Data Reveals Participant Borrowing Patterns

Mon, 02 Feb 2026 17:05:49 GMT

New data suggests individuals’ decisions to take 401(k) loans are driven less by discretionary spending needs and more by day-to-day cash-flow constraints. A December 2025 study conducted by the Employee Benefit Research Institute (EBRI) and J.P. Morgan Asset Management sheds light on what drives participants to take out 401(k) loans and how those funds are used. The research links 401(k) records with Chase household spending data to see who takes defined contribution plan loans and where that money effectively goes.

Housing, Healthcare, and Revolving Credit

Approximately one in 10 private-sector 401(k) participants with a loan option took a new loan in plan years 2021-2022, the study found. Loan activity tended to rise and peak for participants in their 40s before tapering off in later years. The research also shows that new 401(k) loan use strongly increases as credit card utilization rises: just 6.9% of households with no card balance borrowed from their plan, compared to 19.8% of those using 80% or more of their available credit. This pattern indicates a link between borrowing behavior and tighter household cash flow. Additionally, high credit-card-use households contribute a smaller share of income to their plans and have lower plan account balances, further reinforcing the long-term drag elevated debt levels can place on retirement preparedness.

When participants take a new plan loan, the only spending category that reliably shows an increase of more than 10% compared with non-borrowers is healthcare. A second lens, changes in the share of total spending, reveals that housing and unspecified cash spending are more likely to claim a bigger slice of the budget for loan-takers. The data also shows that, for a subset of households, new mortgages and plan loans often start around the same time. Notably, the decision to borrow from the plan appears largely independent of household income.

Releasing Financial Pressure Valves for Participants

The overall pattern suggests 401(k) borrowing tends to align with major medical and household expenses, as well as markers of financial stress, rather than with discretionary spending on travel, entertainment, or other purchases that might signal luxury consumption. This points to the role plan sponsors can play in helping influence loan behavior. Access to emergency savings and budgeting tools and mortgage education programs may help reduce reliance on plan loans while better aligning plan features with household cash flow needs and the financial demands of key life stages.

Sources:

https://www.ebri.org/docs/default-source/pbriefs/ebri_ib_647_dcloansprivsec-4dec25.pdf?sfvrsn=77bf052f_1

The Unique Retirement Planning Considerations of “Single Savers”

Mon, 02 Feb 2026 16:58:10 GMT

It’s been widely reported that the marriage rate among Americans has declined sharply in recent decades. According to the Census Bureau, 60.8% of households were headed by married couples in 1980. By 2024, that figure had fallen to 47.1%

Divorced, widowed, or never partnered singles can face retirement planning challenges that differ from their married or partnered peers. Findings from Nationwide’s latest Advisor Authority study highlight some of these potential challenges.

Nationwide’s survey suggests single investors are acutely aware of the added pressures they face. More than a third say they contend with greater financial strain than married or partnered peers. Moreover, nearly one in five said they wonder if they’ll ever be able to retire. That concern is reflected in the state of their retirement savings: only 23% reported that they have at least $250,000 saved for retirement, and only 18% said they have $500,000 or more.

According to Nationwide, the challenges single savers face tend to surface across several key areas.

Emergency funds It can be more challenging to build an emergency fund on a single income. Not having backup savings in place can make it more difficult to manage the unexpected and adhere to retirement savings strategies.
Long-term care: Singles are less likely to have a clear caregiving solution in place, so long-term care solutions should be considered early in the planning process.
Taxes: Singles could face higher tax rates compared to married couples, which can affect their savings abilities and goals.
Social isolation: The research highlights the importance of a strong support network in a single person’s retirement planning strategy and suggests loneliness can take a toll on emotional well-being – both before and during retirement – which in turn can impact financial decisions.

Without a partner to share the responsibilities of retirement planning and financial decision-making, single workers may benefit more from in-depth, one-on-one guidance and planning conversations with a financial advisor.

Sources:

Industry Experts Debate ERISA Litigation Reform in Recent Hearing

Thu, 29 Jan 2026 16:56:24 GMT

A December 2, 2025 hearing, titled “Pension Predators: Stopping Class Action Abuse Against Workers’ Retirement,” was convened by Subcommittee Chair Rick Allen (R-GA) before the House Education and Workforce Committee and the Subcommittee on Health, Employment, Labor, and Pensions. Expert witnesses claimed that, since a recent Supreme Court decision that may make it easier for plaintiffs’ firms to bring lawsuits alleging ERISA-prohibited transactions and survive motions to dismiss, the constant threat of lawsuits is reshaping fiduciary decision-making long before cases ever reach a courtroom.

Among those testifying was Lynn Dudley, Senior Vice President of Global Retirement and Compensation Policy at the American Benefits Council, who highlighted how litigation fears can constrain sponsors’ ability to adopt innovative plan features that might benefit participants, such as decisions to offer lifetime income options. Witnesses also argued that plaintiff lawyers, not workers, are often the primary beneficiaries of these suits. They noted that many cases are brought repeatedly across the country by a small set of firms with nearly identical, “cookie-cutter” complaints.

Other witnesses, including William Alvarado Rivera of the AARP Foundation, however, argued that rigorous ERISA enforcement and resulting lawsuits have historically improved plan practices and outcomes for participants by helping to ensure that fiduciaries meet their obligations. Rivera also contended that “[r]equiring that plan participants plead information that lies solely within the control of fiduciaries at the outset of a case improperly shifts the burden in ERISA cases.” He added that this requirement would effectively shut out potentially meritorious claims and enable fiduciaries to evade responsibility for ERISA violations.

Sources:

Participant Corner: You Can Now Save More in Your 401(k). See Why That Matters.

Tue, 27 Jan 2026 16:54:23 GMT

Most people don’t look forward to annual IRS announcements the same way they do the next season of their favorite Netflix show, but this one’s worth a look. Higher retirement plan contribution limits have been announced for 2026, and even a modest bump in your savings rate can make a big difference down the road.

Here’s what’s new for 2026:

401(k), 403(b), and 457(b) : the elective deferral limit is increasing to $24,500 (from $23,500 in 2025)
Catch-up contribution (for those aged 50+): the limit is increasing to $8,000 (from $7,500 in 2025)
Super catch-up contribution (for those aged 60–63): the limit remains at $11,250 for 2026
Participants who earned more than $145,000 in 2025 will need to make any catch-ups as Roth (after-tax) contributions

Consider Saving More Today. Your Future Self Will Thank You.

Even a small bump in your annual contribution rate can result in a meaningful boost toward your retirement goals.

Let’s consider Ann. She is 45 years old, earns $50,000 a year, has $150,000 in her 401(k), and contributes 10% of her paycheck annually to the plan. Raising her contribution to 12% (just $1,000 more per year) could yield more than $42,000 in additional savings for Ann over 20 years (assuming an average 7% annual investment return and no change in her salary). Add a 50% employer match on the first 6% of her contributions, and Ann’s overall savings and earning boost could reach approximately $63,000.

Small Moves Can Make a Big Difference

If you want to sock away that extra $1,000 – or any additional amount – to help build a bigger nest egg for your future self, consider one or more of these strategies:

Adjust your budget. Even small changes, like reducing subscriptions or discretionary spending, can help create more space in your paycheck for retirement savings.
Use gift money or other non-paycheck income to make room for savings. Money you get from outside your paycheck can’t go directly into your 401(k), but it can help you take care of other expenses and create an opportunity to bump up your retirement plan contribution rate.
Maximize any employer match. Don’t go it alone. Depending on the formula, your employer match could cover a large share of the extra amount you want to save.

Once you retire, any extra amount you’ve saved and earned could help you cover healthcare costs, create a travel fund, manage financial emergencies, or bump up your charitable giving — whatever future freedom means to you. If you’re eligible and capable, take advantage of catch-up contributions to increase your momentum and potentially make your 50s and early 60s some of your most impactful years for savings. Even if you’ve fallen behind on your retirement savings progress, there’s still time to make a significant difference.

Forge a Brighter Retirement Reality

So, if you’re catching up on Stranger Things over the holidays, remember that you don’t need to visit a parallel dimension to set your future self up for a more secure retirement. Consider what small adjustments today could mean for yourself and your retirement portfolio tomorrow.

The $100 Billion Swing Era | Managing Headline Overload

Tue, 20 Jan 2026 16:52:23 GMT

If you think capitalization swings are getting wider and more frequent, you may be right. By the end of October 2025, there were 119 instances of individual U.S. stocks (mainly large technology firms) moving by more than $100 billion in market cap in a single day this year, according to the International Business Times. In 2025, there were only 42 such instances, and in 2020 there were fewer than 10. These dramatic single-day moves have captured headlines and contributed to a sense that markets are becoming more unpredictable.

For retirement plan participants, these high-profile fluctuations can understandably raise questions and concerns about risk, diversification, and portfolio composition. Large swings in a handful of companies usually shouldn’t affect an individual’s long-horizon savings strategy or require short-term action. Clear communication can help participants understand how their investments are structured — and why a diversified, long-term strategy can continue to serve them well — and alleviate anxiety during periods of elevated volatility.

Sources:

https://www.ibtimes.com/elastic-market-effect-how-100-billion-swings-became-new-normal

Savings Inertia | Moving Beyond the Default

Mon, 19 Jan 2026 16:50:54 GMT

New research has revealed some telling patterns in employee retirement plan contribution rates. According to PLANSPONSOR’s 2025 Participant Survey, nearly 4 in 10 participants said that – when choosing their rate – they simply stayed with the plan’s default setting.

What this means is that the default doesn’t always just start the retirement savings journey. For a significant portion of the workforce, it can end up defining it. The finding reinforces long-held notions around status quo bias and choice overload. That is, when a decision is complex or abstract, many people gravitate toward the path of least resistance. While auto enrollment and other plan design features have been successful in increasing participation, forward-thinking sponsors can consider doing even more.

Plan Design is Key

Plan sponsors have many design options available to them – beyond basic auto enrollment features – to further draw on the influence of behavioral economics. For example…

Raising the initial auto enrollment deferral rate: Increasing the rate can help employees get a faster start on their savings journey.
Enhancing automatic escalation settings: Sponsors can increase individuals’ contribution rates over time by adding or, if applicable, raising, the annual auto escalation increment and/or increasing the escalation cap.
Stretching the match: Sponsors also can encourage higher employee contributions by stretching their match formula. For example, assume a sponsor currently matches 100% of participants’ contributions up to 3% of their salary. The sponsor could encourage people to double their own rate of savings – while holding the company’s match costs level – by instead matching 50% of contributions up to 6% of salary.

Hands-on Guidance Can Play a Crucial (and Welcome) Role Too

While plan design and automatic features can have a positive impact, there’s strong evidence that people also want additional, hands-on support as they make money decisions. Morgan Stanley at Work’s annual State of the Workplace Financial Benefits Study, for example, shows workers are looking for financial and retirement guidance. Of the options provided, respondents expressed the strongest preference for access to a financial advisor (47%) through their employer plan, with goals-based investment planning (45%) and retirement income solutions (43%) not far behind.

From systematized plan design settings to hands-on guidance, sponsors and advisors may want to look for ways to help people move “beyond the default” and into paths that could set them on a better course for retirement readiness.

Sources:

OMB Poised to Review Proposed Rule on Paper Statements and E-disclosures

Thu, 15 Jan 2026 16:48:41 GMT

The regulatory follow-through on SECURE 2.0’s paper-statement mandate is now entering its next stage. The 2022 law includes provisions affecting how benefit statements must be delivered. In general, defined contribution (DC) plans will be required to furnish participants with at least one paper benefit statement each year, unless they affirmatively elect electronic delivery, for plan years beginning after December 31, 2025. An additional provision directs the Department of Labor (DOL) to update its electronic-delivery regulations so that participants and beneficiaries who first become eligible after that date receive a one-time paper notice before their required statements and related disclosures can be furnished electronically.

On September 30, 2025, the DOL’s Employee Benefits Security Administration (EBSA) agency submitted a proposed rule, “Requirement to Provide Paper Statements in Certain Cases — Amendments to Electronic Disclosure Safe Harbors,” to the Office of Management and Budget (OMB). The proposal would update 29 CFR 2520.104b-1(c), part of the DOL’s regulation governing the timing and method for furnishing ERISA disclosures, and 29 CFR 2520.104b-31, the DOL’s electronic-delivery framework often referred to as the “notice-and-access” safe harbor.

The OMB announcement signals that detailed rules are forthcoming on matters that may include formatting, timing and content requirements, delivery standards, and participant elections for statements. The proposed rule follows EBSA’s August 2023 Request for Information, in which the agency sought public input on SECURE 2.0’s various reporting and disclosure mandates.

Once the OMB completes its review, the proposal will be released to the public as a Notice of Proposed Rulemaking, which will subsequently open a formal comment period. OMB typically has up to 90 days (which may be extended) to review a proposal and decide whether to clear it for publication or send it back for revision, though there is no set minimum time frame for review. Plan sponsors may want to monitor the rule’s progress as it moves through the federal rulemaking procedures, and the industry and public comment period.

Sources:

Participant Corner: Six Retirement Plan Benefits You Might Not Know About

Wed, 07 Jan 2026 16:47:06 GMT

When you think of the benefits of your retirement plan, tax-deferred savings and matching contributions are probably top of mind. But there’s more to your workplace retirement plan than meets the eye. Beyond the basics, retirement plans can come with a number of lesser-known advantages that can help you protect, grow, and pass on your savings more efficiently. Here are six perks you might not even realize you have.

Dollar Cost Averaging. Your retirement contributions go into your account on a regular schedule, regardless of fluctuations in the market. This means you buy more shares when prices are low and fewer when prices are high, evening out your average cost per share over time. This is known as “dollar cost averaging.” It’s a simple, steady approach that takes the guesswork and emotion out of investing, helping you stay consistent through market ups and downs.

Greater Creditor Protection. Retirement balances are generally shielded from commercial creditors, adding an extra layer of security for your nest egg. This protection is built into federal law, offering a safeguard most personal investment accounts can’t match. Even if you face a lawsuit or bankruptcy, your retirement savings are generally off-limits to most creditors. While certain exceptions can apply — such as for federal income taxes owed to the IRS — this layer of protection can help keep more of your hard-earned savings dedicated to your financial future.

Access to Exclusive Investments. Your retirement may include options not found in regular brokerage accounts, such as collective investment trusts (CITs). These pooled investment vehicles, maintained by a bank or trust company, are designed specifically for retirement plans and often offer lower costs and greater operational efficiency than mutual funds. CITs operate with fewer marketing and administrative expenses, and they’re managed in bulk for institutional investors like retirement plans. Lower costs can translate directly into higher long-term returns, which can help your balance grow faster over time.

Easier Estate Planning. You can name beneficiaries directly on your retirement account, helping your savings transfer smoothly without probate delays. By naming your beneficiaries, you can help ensure that your savings pass directly to your chosen heirs, avoiding the time, expense, and complications of probate. Regularly reviewing and updating your beneficiary designations after major life events, such as marriage, divorce, or the birth of a child, can help keep your estate plan aligned with your wishes.

Professional Oversight. Retirement plans have designated fiduciaries that are responsible for reviewing fund performance, keeping fees reasonable, and ensuring investment options meet the plan’s standards, giving you the benefit of built-in due diligence and expert oversight. These fiduciaries are legally obligated to act in your best interest, quietly working behind the scenes for your benefit.

Potential Fee Savings. Many larger plans offer institutional share classes with lower fees. While the difference may seem small, perhaps just a few tenths of a percent, those cost savings can add up to tens of thousands of extra dollars over decades of compounding. Lower expenses mean a higher percentage of each contribution stays invested, allowing more of your savings to keep working for you.

By understanding and taking advantage of these benefits, you can help make the most of your plan and strengthen your retirement readiness. A little knowledge can go a long way toward securing your financial future.

Auto Portability | Helping Reduce 401(k) Leakage After Job Changes

Fri, 02 Jan 2026 16:44:01 GMT

The Problem: Cash Out Leakage and Lost Accounts

American workers now hold an average of more than 12 jobs over the course of their careers. During job changes, many end up cashing out small 401(k) balances and not rolling them into tax-qualified retirement plans. Industry studies estimate this trend may be causing an annual savings “leakage” of more than $90 billion due to taxes, penalties, and the missed growth and compounding potential of those cashed-out dollars. “Forgotten” 401(k) accounts may also be slipping through the cracks, further undermining employees’ long-term financial wellness.

Enter Auto Portability: Keeping Savings Connected to Their Owners

To address the issue, members of the retirement industry are supporting an option called “auto portability.” A consortium of major recordkeepers launched the Portability Services Network (PSN) to automatically reconnect small retirement account balances with their owners’ new employer plans when they change jobs.

The consortium’s intent is to have a process that is secure and easy for participants. Here’s how it works… If an employee leaves behind a 401(k) balance below a set level (typically $7,000), the network’s technology searches for that individual’s new employer plan and automatically rolls the old balance into the employee’s new plan account. Participants receive a notice and can opt out if they do not want the transfer. Otherwise, their savings automatically follow them to their next job. Participants pay a low, one-time fee (capped at around $30) when their account successfully transfers.

Plan sponsors should conduct thorough due diligence to understand the terms, conditions, and implications of activating this option for their plans.

Research estimates that if this new feature were adopted widely, it could preserve an extra $1.6 trillion in retirement savings over the next generation. By keeping those small accounts invested instead of being prematurely drained, even modest balances can grow over time and contribute to a more secure retirement.

Sources:

Cybersecurity | A Top Plan Sponsor Concern

Thu, 18 Dec 2025 16:38:47 GMT

According to Escalent’s 2025 Retirement Planscape study, more than half of plan sponsors rank cybersecurity as their No. 1 “plan fear,” ahead of poor investment performance (45%) and insufficient participant savings (43%). That concern is not without evidence. High profile breaches such as the recent attack on a leading recordkeeper affecting more than 1,000 participants and traced to a third-party client management cloud application, demonstrates how a single weak point can compromise participant data and disrupt operations.

In the past year alone, 7% of all plan sponsors (and one in 10 mega plans) reported a 401(k)-related data breach.

The Department of Labor’s website provides the Employee Benefits Security Administration’s (EBSA’s) best practices for retirement plan cybersecurity programs. EBSA states that the guidance is “for use by recordkeepers and other service providers responsible for plan-related IT systems and data, and for plan fiduciaries making prudent decisions on the service providers they should hire.” The recommendations cover 12 areas of retirement plan cybersecurity.

Have a formal, well documented cybersecurity program.
Conduct prudent annual risk assessments.
Have a reliable annual third-party audit of security controls.
Clearly define and assign information security roles and responsibilities.
Have strong access control procedures.
Ensure that any assets or data stored in a cloud or managed by a third-party service provider are subject to appropriate security reviews and independent security assessments.
Conduct periodic cybersecurity awareness training.
Implement and manage a secure system development life cycle (SDLC) program.
Have an effective business resiliency program addressing business continuity, disaster recovery, and incident response.
Encrypt sensitive data, stored and in transit.
Implement strong technical controls in accordance with best security practices.
Appropriately respond to any past cybersecurity incidents.

Participants also can play a role by remaining vigilant for irregularities and reporting them through appropriate channels. Cyberattacks are growing more sophisticated, with AI and other advancements enabling criminals to mimic legitimate users and exploit weak points in vendor networks. Cybersecurity, is and will remain, a plan sponsor concern for the foreseeable future.

Sources:

Advisor Support is Key to Driving Confidence and Outcomes Among Younger Participants

Wed, 10 Dec 2025 16:41:38 GMT

Access to an advisor tends to improve retirement confidence, according to a recent survey by the Employee Benefit Research Institute (EBRI). The Retirement Confidence Survey found that 83% of workers with advisory access feel confident about retirement readiness, compared with just 53% of those without. But is that only because those with advisors are more likely to also have accrued greater wealth over time — or will it also hold true for younger workers with smaller portfolios?

A Kiplinger deep dive into the EBRI data suggests the advisory confidence “boost” is actually greatest among lower balance savers. In other words, professional financial guidance may have its most meaningful impact on younger workers in the early stages of their wealth-building journey.

More than three in four Gen Z employees, those born from 1997 to 2012, are saving for retirement through employer-sponsored retirement plans and/or outside the workplace. Automatic enrollment trends play a role here. But prevailing generational sentiments have a large impact on behaviors too: nearly six in 10 Gen Z and Millennial 401(k) participants expect their personal accounts to be their primary income source in retirement, while only 5% anticipate relying mainly on Social Security.

But saving — and saving enough — aren’t necessarily one and the same. And unfortunately, those falling behind the curve on retirement readiness may not even realize it’s happening.

Meanwhile, many younger Americans are embracing the growing trend of “soft saving,” favoring quality of life today rather than delaying gratification and saving for future goals, such as retirement. Faced with heavy student debt, economic uncertainly and financial milestones such as homeownership feeling out of reach, some younger workers are choosing to prioritize travel, social experiences, and their mental health. Living in the moment, however, may come at substantial cost later on in terms of both mental well-being and quality of life in retirement if savings are inadequate.

This is where an experienced advisor can make a significant impact on the trajectory of a young participant. Part of the mental health “boost” of soft saving may come from the avoidance of facing the realities and challenges of planning for a secure retirement. But avoidance will only provide relief for so long — and delays in retirement planning can be costly and difficult to recover from. By providing guidance, perspective, and personalized, data-driven strategies, advisors can help younger workers balance enjoying life today while preparing for tomorrow.

Sources:

Participant Corner: Six Retirement Plan Benefits You Might Not Know About

Wed, 03 Dec 2025 16:39:29 GMT

Sources:
https://www.equifax.com/personal/education/life-stages/articles/-/learn/protect-retirement-account-from-creditors

https://www.kiplinger.com/personal-finance/the-basics-of-estate-planning

https://www.ey.com/en_us/insights/financial-services/the-growing-popularity-of-cits-in-us-retirement-plans

Market-Based Cash Balance Plans May Solve the Lifetime Income Challenge

Mon, 01 Dec 2025 16:57:58 GMT

October Three makes the case that this kind of defined benefit plan is a ‘gold standard’ solution.

Financial insecurity can hurt retirees’ lifestyles and health, but market-based cash balance plans might be able to protect future retirees’ security, according to October Three Consulting’s “ 2026 Lifetime Income Report: Closing the Gap Between Savings and Security ,” published Wednesday.

Market-based cash balance plans—which are, by definition, defined benefit plans—are the “most balanced and modern [DB] design,” according to the October Three report, which stated the plans are “an almost risk-free solution for employers” that provide employees with higher balances than traditional fixed-rate cash balance plans.

In a cash balance plan, all assets are held in a pooled account, and the participant’s benefit is determined by the terms of the plan document. The account balance grows through pay credits, often defined as a percentage of an employee’s annual salary, and interest credits, at either a fixed or variable rate.

In a market-based cash balance plan, the interest credits are derived from the actual return on plan assets, as opposed to a traditional cash balance plan’s fixed rate of return or a rate of return tied to a bond index. Non-market cash balance benefits tend to be less than traditional DB plans due to low interest credits and often conservative investments, the report stated.

Almost 60% of all DB plans in the U.S. are now cash balance plans, according to October Three’s “ Pension Trends 2025: Cash Balance Plans Take Over—and Market Interest Credits Surge .” In 2018, only about 10% of cash balance plans used a market-based crediting rate, but that figure is now about 60%.

Can the ‘Gold Standard’ Solve the Lifetime Income Problem?

October Three’s report held these specific cash balance options up as a potential method to achieve the common goal of “lifetime income”—regular payouts to retirees on which they can base their financial plans.

Among respondents to October Three’s survey, 75% of those with some form of lifetime income reported that they felt financially secure in retirement, compared with 57% of those without a “lifetime income” setup. Meanwhile, 60% of those without lifetime income said financial concerns had caused them to cut back on leisure activities.

Research leveraging data from the University of Michigan’s “Health and Retirement Study” showed that retirees who feel insecure about their finances are also more likely to experience higher rates of depression, chronic illness and cognitive decline than those who feel secure.

“Retirement income security is not simply about having enough assets,” October Three’s report stated. “It is about having the confidence to use those assets in a way that supports both financial well-being and life satisfaction.”

A market-based cash balance plan gives employees the “gold standard” of what they are looking for from an income perspective, along with an accumulation component that “looks very much like a [defined contribution] plan,” says Idan Shlesinger, a partner in October Three and its retirement solutions practice leader. Market-based cash balance plans represent “the industry learning what works and what doesn’t.”

What Employers Can Do

Shlesinger says the ideal situation is for an employer to offer both a market-based cash balance plan and a DC plan. He explains that while market-based cash balance plans provide security, retirees likely should not have all their money “locked into a guaranteed income stream” in the event they need to withdraw enough to finance unexpected events—or even just a desire to take a vacation.

But offering both plans does not mean employers have to double their spend. Rather, they can divide the money they would spend on one account into two, Shlesinger says.

“For most people, there’s a strong benefit to have a tranche of retirement savings … geared towards security and another tranche … geared toward flexibility,” says Shlesinger.

Shlesinger cautions that while individuals can purchase an outside-the-plan lifetime income product, such as a retail insurance annuity, the returns pale in comparison to those from an in-plan feature. He says that out-of-plan products can be more costly since companies selling them must factor commissions, expenses and profit margins into their pricing.

Moreover, out-of-plan products’ take-up rates are in the single digits, because people are “uncomfortable handing over their savings to an insurer they barely know for a product few understand,” the report stated.

Buying an outside guaranteed income solution is the “best an individual can do [that’s in their control],” says Shlesinger. But he says the “best bet” is to ask an employer to put a market-based cash balance plan in place.

Original source: https://www.plansponsor.com/market-based-cash-balance-plans-may-solve-the-lifetime-income-challenge/

Advisor Support is Key to Driving Confidence and Outcomes Among Younger Participants

Wed, 26 Nov 2025 16:43:28 GMT

But saving — and saving enough — aren’t necessarily one and the same. And unfortunately, those falling behind the curve on retirement readiness may not even realize it’s happening.

Sources:

Auto Portability | Helping Reduce 401(k) Leakage After Job Changes

Mon, 17 Nov 2025 16:45:20 GMT

The Problem: Cash Out Leakage and Lost Accounts

Enter Auto Portability: Keeping Savings Connected to Their Owners

Plan sponsors should conduct thorough due diligence to understand the terms, conditions, and implications of activating this option for their plans.

Sources:

The New Reality of Retirement | When Competing Priorities Take Over

Fri, 07 Nov 2025 15:21:37 GMT

For many workers today, saving for retirement feels almost bleak. According to the 2025 Goldman Sachs Retirement Survey, 42% of Gen Z, Millennials, and Gen X are living paycheck to paycheck. Almost three-quarters say they struggle to save because their money is already stretched across too many other priorities.

And the pressure isn’t slowing down. Goldman Sachs predicts that by 2033, more than half of workers may still be living paycheck to paycheck, and by 2043, that could climb to 65%. It raises a big question: is retirement becoming something most people can’t afford?

Life events make it even tougher. Sixty-six percent of Gen Z and 59% of Millennials have had a major change in the past two years, buying a home, getting married, sending a child to college, or going through a divorce. Seven out of ten people who went through one of these events either paused retirement contributions, borrowed from their plan, or decided to retire later than planned. Greg Wilson, head of retirement at Goldman Sachs, said it best: “Telling workers just to save more ignores the realities they face.” And he’s right. The old advice doesn’t match the challenges people are living with today.

Competing Priorities Are Crushing Savings

Even when people feel on track, the numbers tell a different story. Nearly 70% of savers think they’re doing okay, but 60% expect to outlive their savings. Goldman Sachs calls this the “optimism gap;” people feel confident, but reality is a different story. Every generation is juggling too much. About 30% of Baby Boomers say competing expenses hold them back. That rises to 50% for Gen X, 75% for Millennials, and just over 70% for Gen Z. Student loans, rent, childcare, helping family, there’s a lot pulling their money in different directions.

Employers are seeing it too. Nearly 60% of plan sponsors say their employees are struggling to save because of these competing priorities. Housing costs, for example, have jumped from about a third of household income in 2000 to over half in 2025. College costs are up too, leaving less money to put aside for the future.

Some Progress, But Challenges Remain

There is some good news. Millennials and Gen Z are starting to save earlier and in bigger amounts than past generations. Their savings-to-income ratios are higher than expected, showing they’re paying attention and trying to do the right thing.

Gen X and Boomers face bigger challenges. Many Gen Xers were the first to navigate retirement without traditional pensions, and younger workers, while starting strong, still face new pressures that could slow their progress.

Overall, 55% of people increased their retirement savings last year, while only 8% reduced theirs. The catch is many are still aiming too low while most plan to replace less than half of their income in retirement, which may not be enough to maintain their lifestyle.

Mindset Matters

Goldman Sachs also looked at what makes the biggest difference in retirement outcomes. The largest factor wasn’t just how much people saved—it was “financial grit,” a combination of determination, discipline, and optimism. Personalized advice, early savings habits, access to plans, and insurance all helped too, but mindset made the biggest difference.

Chris Ceder, senior retirement strategist at Goldman Sachs, said, “Saving more is not the only answer. We have to look at different solutions to help people who are feeling the pressure.”

Looking Ahead

People are trying. They’re saving what they can, adjusting when life changes, and doing their best to stay optimistic. But the financial world has changed, and the old strategies don’t always work.

For plan sponsors and advisors, now is the time to get creative. Help employees manage competing priorities through flexible plans, clear communication, and personalized tools. That’s the best way to keep them on track and make retirement feel possible. Most people aren’t ignoring retirement, they’re just trying to make it through today.

Sources:

https://www.plansponsor.com/gens-z-and-x-millennials-struggle-to-save-for-retirement-due-to-competing-priorities

IRS Issues Final Regs on Roth Mandatory Catch-ups for High Earners

Wed, 05 Nov 2025 15:22:58 GMT

The IRS has finalized regulations under SECURE 2.0 that will impact how certain participants save for retirement. Under this change, employees with prior-year FICA wages above $145,000 will no longer be able to make pre-tax catch-up contributions to their 401(k), 403(b), or 457(b) plans. Instead, those contributions will have to be made on a Roth, or after-tax, basis.

The rule takes effect in Jan. 1, 2026. According to the IRS, the regulations “generally apply to contributions in taxable years,” beginning in 2027. However, it also notes that “the final regulations also permit plans to implement the Roth catch-up requirement for taxable years beginning before 2027 using a reasonable, good faith interpretation of statutory provisions.” The administrative transition period (under Notice 2023-62), which generally ends on Dec. 31, 2025, remains unchanged by the final regulations.

Impacts on Late-career, Higher wage Savers

Catch-up contributions represent an important strategy for many workers in the final years leading up to retirement. Shifting these contributions to Roth may reduce immediate tax savings but can provide significant tax-free income later in life.

The Roth feature has become an attractive choice for participants of all ages: As of year-end 2024, 86% of Vanguard plans offered a Roth option, up from 74% in 2020. Among the largest plans, adoption was nearly universal at 95%, while participant utilization climbed to an all-time high of 18%. Nonetheless, higher-earning participants would benefit from evaluating how this shift impacts their contribution strategy and retirement tax profile.

Impacts for Plan Sponsors

To comply with the new rules and support employees through the shift, plan sponsors should focus on several key areas:

Adding Roth Functionality. Plans that don’t currently offer Roth contributions will need to incorporate this feature to allow earners above the IRS threshold to make catch-up contributions. Sponsors should coordinate with their recordkeeper, TPA, advisor, and other service partners as needed.
Payroll Coordination. Employers will need to track which participants exceed the FICA wage limit and ensure catch-up contributions from higher income workers are directed as Roth.
Communication & Education. Sponsors should provide clear guidance and educational materials so affected participants understand the differences between Roth and pre-tax contributions, along with the potential implications for their retirement savings. Consider launching a Roth awareness education campaign to help inform employees.
Individual Consultation. Promote one-on-one advisory sessions to help participants assess how mandatory Roth catch-ups affect their personal retirement strategy.

Participant Engagement Opportunity

The shift to Roth catch-ups for higher-wage earners also gives sponsors an additional touchpoint for participant engagement. Clear education around the tax treatment of contributions can encourage all employees to think more strategically about their retirement readiness. In doing so, sponsors can not only help build stronger participant trust but also reinforce the value of the organization’s retirement benefit.

Sources:

TDF Analyzer 2.0 Frequently Asked Questions

Tue, 04 Nov 2025 15:15:57 GMT

Target date funds remain an incredibly important and popular retirement plan option for advisors, sponsors, and participants. The latest evolution of our Target Date Fund Analyzer adds control and clarity to the TDF analysis process, so you and your clients can make even smarter, more confident decisions. RPAG held a webinar on the enhancements and you can find it here.

Below are answers to questions you may have, to help you:

Get up to speed on the enhanced Analyzer
Bring more and better TDF insights to your clients
Support your fiduciary processes and obligations

What is new in Target Date Fund Analyzer 2.0?

Key updates include:

Enhanced risk band visualization – instantly see where a plan’s participant profile fits within RPAG’s risk spectrum
Flexible question inputs – enter plan-specific data (e.g., savings rates and balances) for a more precise Fit Analysis
New chart views – visualize glidepath risk, underlying fund scores, and peer comparisons
Automated, customizable reports – generate client-ready reports in minutes
Optional Misfit Risk Bubble Chart – determine how well different TDF glidepaths align with plans’ individual participants

How can I access the new Analyzer?

Select “TDF Analyzer” under the Tools menu. You also can access the Analyzer from the client plan page within your portal.

Can I still view or use my old reports?

Reports you have previously created are available in the “Saved Reports” panel for download. Analyzer 1.0 reports remain available for download but cannot be edited. To take advantage of the new visualization and input features, you will need to start a new report in the 2.0 environment.

How does the Fit Analysis work?

The Fit Analysis is the first step in the Analyzer’s three-part workflow. It helps you determine the glidepath risk level that best aligns with participant demographics and behavior.

What is the benefit of inputting plan-specific data versus using “yes/no” inputs?

We believe that specificity drives precision. By providing actual savings rates, account balances, and salary data, you can produce a more tailored risk index and better supporting fiduciary documentation.

What is the Misfit Risk Bubble Chart?

This new, optional module enables you to import individual-level participant data (e.g., date of birth, account balance, contribution rate, and salary) and generate a visual overlay comparing each participant’s optimal portfolio to multiple TDF glidepaths. This module can help illustrate how well each series fits for actual participants in your plan, versus having to derive fit from comparisons to generic benchmarks and averages.

Can I use my own templates or layouts for reports?

Yes. You can select RPAG’s standard template or use saved, custom layouts. With the drag-and-drop builder, you can incorporate modules including:

Fit Analysis summary
Series comparison and glidepath visuals
Misfit Risk Bubble Chart
Three- and five-year risk/return snapshots
Returns by vintage and peer averages

Can I add the Analyzer’s reports to my client’s Service Plan?

Yes. You can link Analyzer-generated reports to client meetings and store them with Service Plan documentation, helping you ensure transparency and maintain a defensible fiduciary record.

Can I export the visuals or include them in my committee presentations?

Yes. You can export all key charts (e.g., risk bands, glidepath comparisons, and bubble charts) as PDFs and integrate those directly into meeting materials or investment policy documentation.

Are the Analyzer’s results investment recommendations?

No. The TDF Analyzer is a fiduciary documentation tool, not an investment recommendation engine. It can help you evaluate, compare, and present data objectively within a prudent review ecosystem and process.

What should I highlight to plan committees when presenting the results?

You can use the Analyzer’s reports and visuals to:

Explain why a particular TDF risk posture fits a plan’s participant base
Compare series based on risk posture, fees, and management style (i.e., active, passive, or blend)
Document a repeatable, defensible fiduciary process for minutes and audit trails

Sponsors and Advisors | Aligning to Meet Today’s Challenges

Mon, 03 Nov 2025 15:25:41 GMT

New research from Fidelity highlights the increasing pressures many employers face as they work to guide employees toward a secure retirement. The study reveals a widening confidence gap, with only two-thirds of employers now believing their workforce is on track for retirement — reflecting a steep drop from just a year ago.

Financial stress among employees can reduce productivity and morale, increase turnover, and raise health care costs across the organization. For plan sponsors, this decline underscores the importance of regularly reassessing plan features, communication strategies, and support structures to help keep employees on course. It’s also a pivotal opportunity for sponsors to partner with plan advisors, who can help offer expertise and solutions to address these challenges.

A Growing Menu of Choices

New plan features and savings vehicles are expanding the menu of options available to participants, giving them more flexibility as well as the potential for lower fees and greater tax advantages. According to the Fidelity survey, more than half of plan sponsors are adding retirement income products, nearly half are adopting managed accounts, and more than four in ten are incorporating collective investment trusts (CITs). Meanwhile, target-date funds continue to evolve with risk-adjusted glidepaths, pooled employer plans are gaining traction, and health savings accounts are playing a growing role in long-term savings strategies.

Each of these options brings its own set of considerations for employers — from compliance requirements to participant communication. Working closely with their advisors, sponsors can better evaluate options for their workforce, assess costs, and help ensure compliance.

Wellness Takes Center Stage

There’s also a growing demand for participant education and financial wellness programming. The survey found that, among the 93% of sponsors who’ve incorporated a wellness program, 60% did so within the past year as financial wellness has moved from “nice-to-have” to “must-have” in benefit design.

For companies that haven’t yet implemented such programs, this rapid adoption may add to the sense of pressure to keep pace with peers and evolving expectations. Guidance from an advisor can help cut through the noise and build programs that align with workforce needs, attract and retain top talent, and achieve other long-term organizational goals.

Partners in Progress

Retirement plan advisors are well-positioned to help sponsors and participants address many of these pressing issues. According to a recent survey by Morgan Stanley, employees rank access to a financial advisor as the most desired option for retirement planning support.

For organizations, whether it’s streamlining investment decision-making, implementing financial wellness programs, adding managed accounts or CITs, exploring new plan design features, or strengthening fiduciary governance practices, a strong sponsor-client partnership can provide clarity and confidence. By working together, sponsors and advisors can meet the moment and help drive better plan outcomes.

Be Present, Not Preoccupied | How Plan Advisors Can Stop Multitasking in Meetings and Bring More Client Value

Fri, 31 Oct 2025 15:18:57 GMT

The modern workplace is filled with distractions: phones lighting up, laptops open, messages pinging in the background. Even at the highest levels of leadership, this has become a problem. Recent reports from The Wall Street Journal highlight CEOs’ growing frustration with employees (and even peers) scrolling, texting, and emailing during meetings. J.P. Morgan CEO Jamie Dimon has called it “ disrespectful ,” while others have gone so far as to hide Wi-Fi passwords or fine distracted team members.

Multitasking, especially in meetings with plan sponsor clients or internal teams alike, quietly erodes trust, clarity, and ultimately, could impact the retirement outcomes of your plan sponsors’ participants.

However, the solution isn’t to police devices or ban technology altogether. Instead, it’s about designing meetings that are purposeful, structured, and worthy of attention. In other words: the antidote to distraction is not restriction, but relevance.

Effective client service starts with human connection, and that begins with how we communicate internally and externally. To achieve that, advisors can rely on what workplace strategist Erica Keswin calls the Three P’s of Meetings: Purpose, Protocols, and Presence.

Purpose: Why Are We Meeting?
Meetings should never be habitual; they should be intentional. Before scheduling time on anyone’s calendar, ask: What do we need to accomplish together that cannot be done more efficiently another way?

If the answer isn’t clear, the meeting might not be necessary. Consider replacing it with a well-crafted email, a shared document, or a quick message. This small discipline saves time and communicates respect for others’ priorities: two qualities that define excellent client service.

Another key protocol is to share meeting materials, agendas, and any relevant background information with all attendees ahead of time. Consider sharing a proposed time block before a 30-minute call to align topics with desired timing. This allows participants to review content, formulate questions, and arrive ready to contribute meaningfully to the discussion. When everyone comes prepared, meetings are more focused, productive, and valuable for clients and advisors alike.

For plan advisors, this is especially critical. Plan sponsors expect their advisor teams to use their time wisely. When every interaction has a clear purpose, whether it’s reviewing plan health, quarterly plan reviews, educating participants, or solving operational challenges, sponsors perceive value. Purposeful meetings help advisors demonstrate thought leadership, not just deliver data. In its “ Redefining Client Service: From Transactional to Transformational” client services primer , our affiliate Great Gray Trust Company reinforces this principle: clarity and consistency in communication are hallmarks of high-performing advisory teams. Every client touchpoint should be designed to advance understanding and decision-making, not just fill a slot on the calendar.
Protocols: How Do We Meet?
Once the purpose is defined, the how matters just as much. Protocols are the “rules of the road” that keep meetings efficient, engaging, and respectful.

Establish no-screen zones. For internal strategy sessions or sensitive client discussions, designate meetings where phones and laptops stay closed unless needed for presentation or note-taking.
Be intentional about format. Use video strategically for remote meetings to foster connection and accountability. Try stand-up or walk-and-talk sessions for shorter updates to maintain energy and focus.
Respect time boundaries. Many of the best conversations happen within 30 minutes. If a topic consistently exceeds that, it may need restructuring rather than more time.

These small cultural norms reinforce the professionalism clients expect. They also make meetings more dynamic, ensuring that every participant contributes rather than multitasks. Advisors who model disciplined meeting behavior send a subtle but powerful message: We value your time as our clients as much as our own. This discipline scales outward to client relationships, reinforcing trust and credibility.

3. Presence: Be Where You Are
Finally, and perhaps most importantly, comes Presence.

Attention is one of the rarest resources today. Attention is truly the new currency. When advisors give clients and colleagues their full focus, they signal respect, care, and competence. Presence builds relationships faster than any marketing collateral can.

This aligns closely with the themes explored in our affiliate’s “Gray to Great” Humanizing Sales in Financial Services podcast featuring Sean Kelly . Authentic connection and deep listening aren’t soft skills; rather, they’re strategic advantages. Clients can tell when an advisor is distracted versus when they’re genuinely engaged.
Similarly, during last year’s National Association of Plan Advisors (NAPA) Conference, Great Gray Group Board Member Dan Dal Degan led a standing-room-only session on how empathy transforms your sales conversations. This recap underscores that empathy begins with attentiveness. Advisors who are fully present can perceive not only what clients say but what they mean, inclusive of their unspoken concerns, priorities, and physical and emotional cues.

Leaders play a crucial role in modeling this behavior. When advisors, team leads, or firm executives consistently show up with undivided attention, others take note. It creates a culture where presence is not optional, it’s expected. As Airbnb’s CEO Brian Chesky put it, he’s striving “not to look at his phone unless it’s an emergency.” That’s not about control; it’s about commitment from the top down.

And people know when you’re really listening.

The Last Word

Distraction is easy. Presence is rare.

The next time you step into a meeting, whether it’s with your internal team, plan participant , or a plan sponsor client, leave the phone face down, close the laptop, and bring your full self to the conversation. You may find that what seemed like a routine meeting becomes an opportunity to build deeper trust and deliver greater impact.

As Redefining Client Service: From Transactional to Transformational reminds us: Client service excellence starts with intention and thrives on attention.

For more practice management articles, bookmark Insights for Advisors here.

Retirement Plan Advisory Group, LLC (“RPAG”) provides technology, solutions and services for a fee to its customers, who are primarily retirement plan advisors and associated institutions. The services include ratings of various third-party investment vehicles based on RPAG’s proprietary quantitative and qualitative scoring methodology. The investment vehicles do not pay to be evaluated and scored; nor do the companies that provide services to the investment vehicles pay for them to be evaluated and scored, but those companies may have commercial relationships and affiliations with RPAG.

Great Gray Trust Company, LLC (“Great Gray”) serves as trustee and provides administrative services for collective investment trust funds (“Great Gray Funds”) that are scored by RPAG. Great Gray and RPAG are wholly owned by Great Gray Group, LLC. Great Gray has a commercial relationship with RPAG that does not involve the evaluation and scoring of Great Gray Funds.

Participant Corner: Staying Financially Grounded This Season

Tue, 28 Oct 2025 20:24:20 GMT

As the year winds down it’s easy for spending to ramp up. From travel and celebrations to those endless online deals that pop up in your feed. But even small splurges can add up fast. According to a recent survey by Achieve and Talker Research, 65% of Americans say they are stressed about their holiday spending, and 73% say that financial stress detracts from their enjoyment of the season.

If you’re hoping to enjoy the season and keep your finances on track, here are three simple ways to find balance:

Start with a Realistic Budget
Before the season gets busy, take a quick look at your monthly income and expenses to determine what’s truly available for discretionary spending: Monthly Income – Monthly Expenses = Your Seasonal Budget. Make a list of what matters most, family, travel, events, or gifts, and set clear spending limits for each. This keeps your goals front and center and helps prevent impulse purchases. Think long-term. Consider setting aside a small amount each month next year for seasonal spending. This approach helps smooth out costs, so the end of the year feels less overwhelming.
Be Intentional with How You Pay
Whether you’re shopping online or in person, how you pay can influence how much you spend. Using cash or debit helps you stay connected to your budget, when it’s gone, it’s gone. If you prefer digital payments, consider setting up alerts or spending caps through your banking app. These small guardrails can help keep your spending transparent and manageable.

Get Creative with Savings
Stretch your dollars by planning and shopping smart:
Use discounted gift cards or cash-back apps when available.

Compare prices before you buy; browser extensions can do this automatically.
Look for experiences or thoughtful gestures that don’t rely on a big price tag.

Every bit of savings adds up, especially when prices are higher across the board.

A Moment to Reflect

As this season encourages connection and reflection, it’s also a great time to check in on your overall financial health. The choices you make now, even small ones, can set you up for a more confident start to the new year.

Sources:
https://www.achieve.com/about/press/holiday-debt-can-linger-until-mid-2025-achieve-survey-finds

Other Benefits Developments

Tue, 21 Oct 2025 20:12:05 GMT

Prescription drug costs remain one of the biggest challenges for both employers and employees. The executive orders call for greater transparency and accountability in drug pricing. For plan sponsors, this is a reminder to regularly review plan design, negotiate with vendors, and explore tools that can help employees access medications at lower costs. A proactive approach here not only protects your budget but also shows employees you’re invested in their well-being.

Pharmacy benefit managers (PBMs) are also under the microscope. Their practices often feel like a black box, and related executive orders highlight a push for clearer reporting and oversight. Plan sponsors may soon need to demonstrate they understand the cost structures behind their PBM contracts. Even before regulations arrive, it’s smart to ask tough questions now: how are rebates handled, where are savings going, and is the arrangement aligned with participants’ best interests?

Wellness programs are another area where employers should be paying attention. While many organizations already offer these programs, the spotlight is shifting toward initiatives that address total well-being—physical, financial, and mental health. For sponsors, this could mean re-evaluating existing offerings, from gym reimbursements to financial education workshops. The key is ensuring programs provide meaningful support to employees.

Reproductive health is also expected to remain at the forefront of public policy discussions. This is a sensitive area, but one where sponsors may soon find themselves navigating new compliance expectations. Staying informed, keeping open communication with providers, and being ready to adapt benefits offerings will be essential as the legal landscape evolves.

The common thread across these developments is anticipation. By starting conversations now—with your advisors, providers, and internal teams—you’ll be ready to pivot smoothly when changes arrive. Proactivity also builds trust. Employees notice when their employer takes steps to improve transparency, manage costs, and offer meaningful benefits. Staying ahead of the curve reinforces your role as a responsible sponsor and a supportive employer.

Sources:
Nixon Peabody LLP, “Executive orders: What employee benefit plan sponsors should know,” July 18, 2025.

Rising Markets Don’t Lift All Participants

Fri, 17 Oct 2025 20:02:24 GMT

Markets have been flirting with record highs on a regular basis, but not all employees are riding the wave toward retirement readiness. According to Vanguard’s How America Saves 2025, participation and/or balances still lag for low-income workers, young employees, women, and those with short tenure. These segments face unique hurdles that statistical averages may conceal.

Forward-thinking plan sponsors can respond with non-fiduciary plan design and education strategies that go beyond the obvious to address real-world financial challenges.

Sidecar emergency savings. Help employees better manage cash flow and reduce the likelihood of early withdrawals that can undercut retirement readiness. By giving workers a safe cushion with a pension-linked emergency savings account (PLESA), sponsors can help employees ease day-to-day financial stress and avoid the long-term consequences of tapping retirement accounts early. They might even lower reliance on 401(k) loans by providing another source of accessible funds.

Student loan repayment benefits. Engage younger workers in ways that match their financial realities in a relatable way. . For example, with SECURE 2.0, sponsors can offer matching contributions on student loan payments, allowing participants to reduce debt while building retirement savings. More broadly, education is key to encourage the establishment of early saving habits, proactive student debt management, and consistent retirement plan contributions — tangible steps toward long-term financial health.

Retirement reboot campaigns. Sponsors can help smooth the path to restarting contributions for employees returning from family leave by providing targeted education. For workers balancing caregiving responsibilities and income interruptions, a re-engagement initiative can include a welcome back package, retirement restart kit, an invitation to a personalized advisory reset session, catch-up contribution calculators, and other relevant educational resources. These steps can help reduce the risk of lost saving momentum during major life transitions.

Targeted financial wellness. Education can address the needs of groups most at risk of falling behind. Well-designed education programs use inclusive examples, real-life scenarios, and accessible language that resonates with different demographics. Just as importantly, the content should cover practical topics that naturally align with common challenges these groups often face — such as budgeting on variable income, managing high-interest or student debt, or rebuilding savings after a career break.

Looking Past Numbers to Participant Needs
Retirement readiness averages may be misleading when outliers can have an outsized effect on performance metrics. Sponsors who take a deeper dive into their participant segments and are willing to think creatively can shift mindsets to help close participation gaps.

Sources:

PEPs Gaining Ground, But One Size May Not Fit All

Mon, 13 Oct 2025 20:08:09 GMT

The Department of Labor (DOL) is asking for public input on how to support small businesses that want to adopt pooled employer plans (PEPs), a signal that regulators see these arrangements as one way to help close the coverage gap. PEPs have gained significant traction since they first became effective in 2021.

PEPs expand on the MEP model by addressing two features that previously complicated participation in these plans. First, they eliminate the “commonality” requirement, which stipulates that employers must share an industry or location. And second, they sidestep the “one bad apple” rule, where one employer’s mistake could jeopardize the qualified status of the entire plan. PEPs are required to be administered by a pooled plan provider, or PPP.

These plans are showing signs of growth. Aon’s PEP, for example, has more than doubled in assets over the past two years and now manages over $5 billion for 130 employers and 100,000 participants. According to the DOL, per-participant costs in the three largest PEPs ranged from 0.23% to 0.42% in 2023, compared with Morningstar’s data showing the median cost in small stand-alone plans at 0.84%.

Limitations and Considerations

Nonetheless, PEP adoption by small businesses has yet to become widespread. Standardized plan designs often leave less room for customization to meet the unique needs of any given workforce. Employers seeking flexibility in match formulas, auto-features, or financial wellness programs may find many PEPs too rigid.

Employers also give up a measure of governance and control, since fiduciary and administrative decisions are more centralized within the pooled arrangement. This differs from traditional plans, where sponsors can have greater flexibility to change out a recordkeeper, investment menu, or a TPA that’s not a good fit. And because the PEP model is still relatively new, the regulatory environment remains fluid. Guidance from the DOL and other agencies will continue to evolve, and plan sponsors may encounter changes along the way.

PEPs are not universal or a complete solution. According to the Federal Register, “under federal law, employers joining a PEP are legally responsible as fiduciaries for the proper selection of investment options for their employees unless the pooled plan provider hires an investment professional to act as a fiduciary with respect to investment selection.” Sponsors also have a duty to prudently select and monitor the PPP and other providers/fees.

Takeaways for Plan Sponsors

While the ongoing evolution and adoption of PEPs is worth monitoring, the trade-offs in flexibility, governance, and investment access may in some cases outweigh the benefits of a more tailored and flexible structure. Employers, for example, can also ease fiduciary burdens and lower costs through options like hiring a 3(38) investment manager, adding a 3(16) plan administrator, or incorporating CITs into their lineup — without needing to join a PEP.

Sources:

Participant Corner: Retirement May Be Your Next Adventure

Thu, 09 Oct 2025 19:40:35 GMT

Retirement could often be seen as the “end of the road,” but that idea may not fit everyone. Your retirement could be a new chapter than a closing one.

While some may choose to move into semi-retirement, mixing part-time work with more free time for their family, hobbies, or travel. Others could explore second careers, sometimes in completely different fields they’ve always been curious about. And many may use the time to volunteer, start passion projects, or dive into creative pursuits they didn’t have time for before.

Some may see retirement as a chance to stay active and engaged rather than stepping away completely. Retirement isn’t necessarily an ending; it could be an opportunity to reinvent oneself.

Why should this matter?

While reaching your destination of retirement, you may ask yourself, what now? Finding your purpose and having the freedom to do so, allows you the flexibility to design a schedule catered to you. Not only will you have flexibility with your schedule but with your growth too. What are some things you would like to try? Traveling to a new place, starting your own business, or slowing down with intention, think of something you will find fulfilling. Some of your ideas could potentially be a way to supplement your income as well as keeping you energized and financially flexible. Get excited, this could be a fresh chapter for you. Having a right mindset could help ease your process.

At the end of the day, retirement may not be the end of your story, it could be the start of a brand-new one. What might your next chapter look like?

Sources:

Payroll Integration, 6 Big Retirement Trends to Watch in 2025
The Times, Thousands of over-50s are choosing to embark on a second career in an entirely new field

Participant Corner: 3 Ways to Retire with Confidence

Thu, 25 Sep 2025 20:21:03 GMT

Frequently, the news about retirement is pretty pessimistic. Pensions no longer exist for most workers, we aren’t saving enough, and Social Security is going to disappear.

However, things may not be as bleak as they are often painted. Retirement plan consultants suggest three ways that anyone can use to help them retire:

Start saving now. No matter what your age or financial circumstances, you’ll improve your retirement prospects if you start saving now. Ideally, you should set aside at least 10 percent of your income, but it’s more important to get started than to worry about exactly how much you can save. An employer-sponsored retirement plan can help you by allowing you to save pre-tax dollars, and the interest on your funds also accumulates free of taxes. You will be taxed at your normal rate when you withdraw funds. If your employer matches all or a portion of your contribution, that will immediately boost your savings.
Choose appropriate investments. It’s important to balance your personal tolerance for risk against potential gains. While conservative investors might want to put all their funds into savings, like money market accounts or certificates of deposit, returns on those types of accounts are low, and often barely outpace inflation. Even conservative investors may need to have a portion of their assets in investments with a higher potential return, such as stocks, to help their portfolios grow.
Maximize your retirement income. One way to increase your income in retirement is to work longer. You’ll have more time to save, and waiting to claim Social Security means you’ll get a larger benefit later. Even working part-time will help your retirement income. Other ways to maximize your retirement include downsizing your home and/or moving to a location with a lower cost of living.

The Weight of Fiduciary Responsibility for Helping Retirement Plans Provide the Best Financial Outcomes for their Participants

Tue, 16 Sep 2025 20:15:16 GMT

In today’s increasingly litigious and tightly regulated retirement plan landscape, there are few roles in financial services under as much scrutiny as that of a fiduciary retirement plan advisor. Advisors must rigorously comply with fiduciary standards that courts describe as the “highest under the law” – and are well served to clearly document their fiduciary processes.

As the industry continues to evolve, three critical challenges are shaping the future of retirement plan advising.

Key Challenges Facing Retirement Plan Advisors

Rigorous Fiduciary Standards
The Employee Retirement Income Security Act of 1974 (ERISA) statute, as interpreted by the Supreme Court, requires that all fiduciary investment recommendations and decisions be made for the sole purpose of maximizing risk adjusted financial returns. Plan advisors should implement a rigorous process to ensure that all investment recommendations and decisions meet this standard. While this standard cannot be changed by executive or agency action, plan advisors should be well-versed in the latest regulatory developments and litigation trends. Increasingly, clients view receiving updates in these areas as a non-negotiable part of the advisor’s role.
Increased Litigation Risks
ERISA litigation challenging fiduciary decisions for 401(k) and other defined contribution plans have exploded over the last 15 years, which bring into focus the importance of rigorous compliance with the ERISA fiduciary standards. But litigation risk doesn’t change the standard governing advisor recommendations or decisions. Plan investment recommendations or decisions should be made for the sole purpose of maximizing risk adjusted returns, regardless of litigation scrutiny. The best ways to mitigate litigation risk is to scrupulously follow this ERISA investment standard and document a robust process used to arrive at plan investment decisions.
Time-Consuming Documentation
Documenting a fiduciary process can be time consuming – but also essential given the scrutiny plan fiduciaries face. A key form of documentation can come from minutes of fiduciary investment committee meetings. Minutes may provide the clearest illustration of a robust process to reach fiduciary decisions, including ones related to investment selection methodologies, fee benchmarking, ongoing monitoring, and potential investment replacements. The importance of documentation in a modern retirement plan, and the burdens in creating it, underscore the benefits of tools and processes that streamline documentation efforts without sacrificing quality.

How Advisors Can Adapt and Stay Compliant

How can advisors stay ahead of the curve and keep providing their clients with outstanding value in light of the substantial obligations of retirement plan advising? Adopting effective compliance procedures, embracing technology, and proactively informing clients of their fiduciary duties are all essential to success.

Leverage Technology for Document Management

It is becoming increasingly important to invest in a centralized, secure document management solution to document robust fiduciary processes used to make investment recommendations or decisions that satisfy ERISA and other legal requirements. Advisors may manage, preserve, and arrange important fiduciary documents with the help of solutions like RPAG's Fiduciary Briefcase. This tool can enhance fiduciary processes, and, if responding to audits, legal threats, or regulatory reviews, it can help quickly access and submit responsive records. In addition to increasing productivity, centralized document storage gives employer plan fiduciary clients more assurance by showcasing a dedication to transparency and readiness.

Educate Employer Plan Fiduciary Clients on Their Responsibilities

Most employer plan fiduciaries require training to understand the extent of their fiduciary duties – training that, in of itself, can be evidence of a robust fiduciary process. Advisors have a powerful opportunity to add value by offering ongoing fiduciary education and training to their employer plan fiduciary clients. When employer plan fiduciaries understand their obligations and how to meet them, they are more likely to appreciate the advisor’s expertise and partnership. More importantly, an educated employer plan fiduciary is a critical ally in maintaining a culture of fiduciary excellence.

Building a Future-Proof Advisory Practice

The role of a retirement plan advisor is both complex – and critical for helping secure the financial retirement security of plan participants and beneficiaries. Doing so demands a disciplined, proactive approach. Advisors who embrace technology, prioritize documentation, automate compliance workflows, and invest in client education can have a leg up in having the tools to be best positioned to thrive.

Supreme Court Lowers Bar for ERISA Lawsuits

Fri, 12 Sep 2025 20:16:53 GMT

A recent Supreme Court ruling has changed the rules of the game for retirement plan lawsuits — and it could make life more challenging for plan sponsors. On April 17, 2025, the Court issued a unanimous decision in Cunningham v. Cornell University that makes it easier for certain ERISA lawsuits to move forward, potentially leading to more cases, higher litigation costs, and increased settlement pressure.

At the heart of the case is the rule against “prohibited transactions” under the Employee Retirement Income Security Act of 1974 (ERISA). These are certain dealings between a retirement plan and “parties in interest,” such as service providers or the plan sponsor, that carry a high risk of conflicts of interest. They can include selling or leasing property to the plan, lending money, or providing goods and services. While these rules are strict, ERISA also allows for exemptions when the transaction is necessary for plan operations, the agreement is reasonable, and the compensation is no more than reasonable. These safeguards are designed to protect plan participants while allowing the plan to function effectively.

The Cunningham lawsuit centered on Cornell University’s 403(b) retirement plan. Plaintiffs alleged that plan fiduciaries caused the plan to overpay for recordkeeping services from TIAA and Fidelity. Lower courts dismissed the case because the plaintiffs had not addressed whether an exemption might apply. That decision was reversed on appeal, and the Supreme Court has now affirmed that plaintiffs are not required to address exemptions at the pleading stage. Instead, it is the responsibility of the defense to raise and prove them later in the process.

Although the dispute arose in the context of a 403(b) plan, the Court’s reasoning applies to all ERISA-covered plans, including 401(k) and defined benefit plans. The decision means more cases could advance beyond early dismissal and into costly discovery, increasing the likelihood of settlements even in cases where the facts may ultimately favor the defense

This ruling reflects a broader legal trend in which courts are allowing more ERISA cases to move forward, particularly those involving service provider arrangements and fees. For plan sponsors, the message is clear: proactive oversight is essential. Regularly benchmarking plan fees, reviewing all forms of compensation, and documenting fiduciary decisions in detail can help demonstrate prudence and reduce risk.

In today’s environment, a strong and well-documented fiduciary process is not just best practice — it’s your strongest line of defense against costly and time-consuming litigation.

Sources:
Supreme Court Opinion in Cunningham v. Cornell University, April 17, 2025

Opening the Door Wider to PE

Wed, 03 Sep 2025 20:18:47 GMT

According to the 2024 DC PLANSPONSOR Benchmarking Report, only 2.2% of plan sponsors include any alternative investments whatsoever within their 401(k)s. That number may soon begin to shift. On August 7, President Trump signed an executive order intended to expand access to private equity (PE) and other alternative assets in retirement plans. Even so, this remains a complex topic for plan sponsors, who must weigh multiple factors before adding PE to their lineup.

Private equity can offer opportunities for enhanced long-term returns and increased portfolio diversification. For some participants, access to PE through a target-date or other managed fund could be beneficial. However, these potential advantages must always be balanced against the inherent risks and challenges of this highly specialized asset class.

New Asset Class, Same Rules

Common concerns with PE as an investment for the average saver include complexity and costs . Unlike traditional equity and bond funds or ETFs, PE investments can often involve less liquidity, greater risk, and higher fees. These challenges may be mitigated through products that package PE into diversified, multi-asset vehicles with greater liquidity, though plan sponsors still have a fiduciary responsibility to ensure the investment is prudent and appropriate for their participants. Sponsors should carefully vet any PE-related investment for its valuation methods and consistency with the plan’s long-term goals and risk parameters.

Regardless of the assets in the lineup, ERISA standards are clear and well-established: Plan fiduciaries must act solely in the interest of plan participants, with the exclusive purpose of maximizing risk-adjusted returns, net of fees. The recent executive order is unlikely to alter that underlying framework.

Moving Forward with Clarity and Confidence

If the choice is made to include PE exposure in the plan, clear communication becomes essential. Employers should help participants understand the nature of PE investments and how they may behave differently from more traditional publicly traded securities. And on an individual basis, they should be given tools and resources to assess how well PE fits into their overall asset allocation and financial plan — as well as the potential risks and trade-offs involved. Education can take the form of webinars, articles, videos, and in-person group and one-on-one sessions. Explaining how a PE allocation is managed within a target-date fund, for example, can also help demystify this new type of investment option for participants.

Seek Strategic Alignment

Sponsors must determine whether and how PE exposure supports their broader objectives for the plan. There’s no one-size-fits-all answer, and sponsors should work closely with their retirement plan advisor, recordkeeper, and ERISA counsel when evaluating the implementation of PE into their investment menu.

The decision to expand participants’ access to PE in plans should be driven by a careful consideration of participant needs, plan design, and fiduciary obligations. Plan sponsors must make a careful determination of how PE exposure aligns with the plan’s Investment Policy Statement. For sponsors who proceed, the path forward should include enhanced due diligence, thoughtful communication, and ongoing monitoring to ensure the investments offered continue to serve participants well.

Sources:
https://www.plansponsor.com/ahead-of-executive-order-what-to-know-about-private-equity-in-401k-plans/

Rethinking Pension Surplus Dollars: Avoiding the Termination Trap

Wed, 27 Aug 2025 21:16:03 GMT

As rising interest rates have reshaped pension funding dynamics post-COVID, many corporate defined benefit (DB) plans are now experiencing significant surpluses. According to actuarial firm Milliman, the 100 largest corporate DB plans, in aggregate, held an estimated $62 billion in excess assets as of December 2024.

Under existing tax law, defined contribution (DC) plan sponsors have limited options for using these surplus funds because, as a rule, accessing the excess assets requires terminating the plan. However, two new proposals from the American Benefits Council could offer an alternative path forward.

In letters sent to the chairs of the House Committee on Ways and Means and the Senate Committee on Finance, the council outlined legislative recommendations that would allow employers to repurpose pension surpluses without requiring them to terminate their DB plans.

Unlocking Surplus Dollars from DB to DC Plans

The first proposal would permit companies to transfer excess assets from an overfunded DB plan into a DC plan, such as a 401(k), for the benefit of current employees. This would enable sponsors to keep the pension plan intact, while still making use of the surplus to help enhance employee retirement security in other ways.

Support for Active Employee Health Coverage

The second proposal to the committees focuses on retiree health accounts. Under its recommendations, employers would be permitted to redirect the surplus assets in overfunded DB accounts toward funding health care benefits for their current, active employees.

Both proposals are seeking to modernize the rules governing surplus DB asset use while preserving the integrity of existing defined benefit plans. They would also help prevent what some policymakers might view as a “double dip” — repurposing surplus dollars into new benefit obligations while claiming a second tax deduction. The proposed changes would limit any future deductions on amounts already receiving favorable tax treatment, mitigating potential revenue loss to the federal government.

Implications for Plan Sponsors

If enacted, both of these provisions would provide sponsors with greater flexibility to optimize benefit offerings without dismantling well-funded pension plans. For many companies, this could mean retaining their DB plan structure while giving them more options to address their evolving workforce needs.

The proposals are in early stages and would require legislative action if they were to be enacted into law. Still, they reflect growing interest in revisiting pension policy to reflect today’s funding realities as well as workforce and plan sponsor needs.

Source: https://www.americanbenefitscouncil.org/pub/?id=ed02fe69-b2ef-6632-a9f6-84a8a70349c9

Engaging the TikTok Generation on Retirement

Mon, 18 Aug 2025 21:07:44 GMT

Nearly a quarter of all Gen Z employees aren’t enrolled in a company retirement plan, according to BenefitsPro. That’s three times the rate of millennials, Gen X, and Boomers. In addition, 12% of Gen Zers don’t take advantage of any workplace benefits at all, twice the rate of other generations.

Here are ways plan sponsors can help prevent their youngest workers from experiencing financial FOMO by sitting on the sidelines of their employer-sponsored retirement plan.

Tailor plan design. Plan sponsors may improve engagement by offering immediate eligibility for participation and matching, automatically enrolling new hires at modest deferral rates with auto-escalation features, and linking student loan payments to employer contributions. Emergency savings features and Roth options may also resonate with this cohort, helping them manage both short- and long-term needs.

Use short-form videos. Provide education about the benefits of 401(k) participation via TikTok-style videos on internal platforms or social channels. This generation may prefer fast, engaging content over longer-form articles.

Highlight flexibility over distant retirement dreams. Frame contributions as a step toward financial freedom. This could mean taking career breaks or more travel experiences — not just retiring at 65. When young employees can see how retirement savings fuel a lifestyle they care about, they’re more likely to start now.

Make enrollment feel like an app. Use mobile-first, intuitive interfaces for benefits enrollment. Gen Z expects user experiences to feel more like Apple or Amazon, not clunky HR portals. Reduce friction in the user digital experience. Plan sponsors should work with providers who offer enrollment options that mirror the apps Gen Z uses daily.

Offer purpose-driven messaging. Emphasize how financial wellness supports independence and the ability to enjoy a greater breadth of life experiences, or lets them contribute to causes that matter to them. This generation often views money as a means to impact, not just for the purpose of accumulation. Purpose-oriented messaging is likely to resonate more with this cohort.

Integrate with onboarding gamification. Build benefits participation into early-stage onboarding with milestone achievements or rewards. Gen Z may respond well to gamified processes. Badges, or tiered goals can nudge participation. Even something as simple as a “first contribution” celebration badge can provide a motivational spark.

As Gen Z enters the workforce, it does so during a time of economic uncertainty, high student debt, and rising housing costs. They face delayed financial milestones and a different perception of long-term planning. Many also began their careers during the COVID-19 pandemic, shaping a worldview that values flexibility, purpose, and digital fluency, though they still appreciate human guidance. Helping Gen Z build financial resilience today and setting them up for a more secure financial future tomorrow requires the willingness to rethink how retirement planning is communicated and delivered — because the habits they form now will shape their future and the retirement landscape for decades to come.

Sources:

Talking Retirement Across Generations

Thu, 14 Aug 2025 21:24:30 GMT

In today’s workforce, the demographic ages range from Gen Z to Baby Boomers. This is a gap of approximately 60 years! Plan sponsors should be adjusting their communication strategies to better reach each generation.

To understand how to change these communication strategies, look first at the generational preferences for each age group and then how a plan sponsor can adjust messaging.

Starting with Gen Z (1997 – 2012), they grew up in the digital boom where they prefer concise, visual content accessible through their phones. They value authentic and transparent information, especially with financial wellness programs. In their current life stage, they are focused on basic financial literacy, moving out, learning how to save for retirement, and entering the workforce. With the overwhelming amount of information available on the internet (that may or may not be reliable), it’s important to have very straightforward wording as well as include interactive content such as calculators or readiness quizzes to keep them engaged.

Millennials (1981 – 1996) are also extremely comfortable with technology, expect their information to be accessible online, and similarly to Gen Z, also want mobile-friendly content. The financial responsibilities of Millennials are diverse with possibly saving for a house, starting a family, or paying off student loans. With this increased amount of responsibility, they want to view their content when it’s convenient for them, which means financial education needs to be available 24/7. When sending out communications, use clear language that relates to their life stage and explains how using different savings tactics now can change the outcome of their retirement years.

For Gen Xers (1965 – 1980), they want straightforward information with every detail they will need to make informed decisions. With their retirement age being only 15-20 years away, it’s important to communicate projected income needs and understand catch-up contributions when the time comes. Known as “the sandwich generation,” this age group is juggling retirement saving, college costs (if they have children), and elder care. Digital communication is not as heavy of a factor as Gen Z and Millenials, and they place a higher value on human guidance, especially for big decisions, leaving you with an option to offer 1-on-1 meetings to boost that participation.

Lastly, Baby Boomers (1946 – 1964) are more traditional, leaning towards print options and in person meetings rather than everything digital. Being so close to retirement, their communications should include deadlines and checklists to remind them about age-based milestones. Including information about how to increase their income stream during retirement will be another important factor in getting through to this generation.

Different generations require different needs when it comes to financial and retirement saving education. Tailoring those communications to each group will be imperative to increasing participation across your organization.

Sources :

Participant Corner: Should You Borrow or Keep Driving?

Tue, 12 Aug 2025 20:31:28 GMT

Before You Take a Retirement Plan Loan Know the Facts

Your retirement plan may allow you to borrow from your account—but before you do, it’s important to understand how it can impact your future savings. Think of it like a U-turn on your savings highway. It could cost you more time and money than you expect.

What You Should Know

Loan Limits (2025) – The IRS allows you to borrow the lesser of 50% of your vested account balance or $50,000. Some
plans may offer a minimum loan amount to obtain the loan.
Repayment Timeline – Most loans must be repaid within 5 years (longer if it’s for your primary home purchase) with
regular payments at least quarterly.
Taxes Twice – Loan payments are made with after-tax dollars, and when you eventually withdraw those funds in
retirement, they’ll be taxed again.
Interest Isn’t a Freebie – The interest you pay goes back into your account, but it’s not deductible. You’re still paying
with after-tax money, and those funds will also be taxed when withdrawn.
Lost Growth – While that money is out on loan, it isn’t invested—so you miss out on potential earnings.
Reduced Savings – Participants’ contribution rates typically fall by about 0.8 percentage points after taking a loan.
If You Leave Your Job – Any remaining balance usually becomes due right away. You generally have until your tax filing deadline (including extensions) to repay the loan—or it’s treated as a taxable distribution. If you’re under 59½, there’s
typically a 10% penalty too
One Loan at a Time – Many plans allow only one outstanding loan at a time, so borrowing now might limit future
options if another need arises.

How Common Are Retirement Plan Loans?

About 5% of participants currently have an outstanding loan, with an average balance of roughly $10,600.
Loan sizes have also been creeping up, recently increasing by about 4%—a bit faster than inflation—showing a trend toward higher borrowing.

Making the decision to take a loan from your retirement plan may seem like an easy option—but it could reduce your future savings and lead to taxes, penalties, and lost growth. Make sure you understand your plan’s rules and consider your other solutions first.

Moving Target Dates | Delayed Retirement Realities

Fri, 08 Aug 2025 20:56:05 GMT

For many American workers over 50, retirement timelines have become a moving target, with increasing numbers now planning to stay employed longer due to economic volatility, market uncertainty, and the rising cost of living. Gen Xers, now in their mid-to-late 40s, 50s, and early 60s, are increasingly anxious about their retirement readiness. With median retirement balances of a 55-year-old at $50,000 and confidence in Social Security eroding, some say they simply can’t afford to stop working.

How can plan sponsors support employees through these shifts while also managing the ripple effects?

Anticipate organizational impacts. Delayed retirement brings significant implications for employers and workers, both in terms of risks and potential rewards. For companies, wage and benefit costs can rise, succession plans may stall, and younger employees might face slower promotion paths. On the other hand, retaining experienced employees, particularly in part-time or phased-retirement roles, can help organizations preserve valuable institutional knowledge, boost mentorship potential, and add stability to teams in transition. For employees, the need for continued employment can pose challenges, especially for those with health issues. However, it can also bring greater financial stability as well as a continuing sense of purpose and contribution.

Consider “flextirement” options. More workers are looking at blending reduced hours with a phased transition out of the workforce. One survey found 80% of U.S. adults plan to work in some capacity after retirement, with 25% hoping to stay full-time beyond age 60, and 16% interested in continuing with their current employer part-time or as a consultant. Retirement can be seen as an offramp, rather than a cliff. Plan sponsors can support this shift by offering flexible arrangements that retain valuable talent while helping employees ease into retirement on their own terms.

Encourage personalized one-on-one financial planning. As confusion and anxiety about retirement grow, especially among Gen Xers uncertain about Social Security and their long-term financial stability, plan sponsors can help by making personalized, one-on-one guidance more visible and accessible. Talking through scenarios with a financial advisor can clarify trade-offs, highlight overlooked options, and give employees a better sense of control over their evolving retirement outlook.

Hitting a Moving Target
How do you hit a moving target? Anticipate movement and direction. The earlier both plan sponsors — and participants — recognize that retirement timelines are shifting, the better they can plan, prepare, and pivot. For the employee, this may mean reworking their financial plan with an advisor. And for the employer, it may involve looking for ways to continue engaging the employee through part-time work or project-based consulting in areas where their experience can create the most value, whether mentoring newer employees or leading knowledge transfer efforts.

As retirement timelines shift, sponsors have an opportunity to recalibrate their aim to keep their organizations, and their participants, on track.

How Legislation, Location, and Longevity Are Shaping Retirement Readiness

Wed, 06 Aug 2025 21:29:40 GMT

Retirement planning starts with numbers such as savings targets, contribution rates, and investment returns. These kinds of foundational metrics guide the structure of retirement strategies and inform plan design. Yet even the most precise calculations don’t exist in a vacuum. Factors like geography, public policy, and life expectancy function as contextual forces, offering mitigating variables that can shape how those numbers play out in real life. Plan sponsors have an opportunity to support more informed, context-aware decision-making by helping to address these broader considerations.

Legislation: Implications of Social Security Shortfall Projections

The latest Social Security Trustees Report moved up the projected depletion date for the combined Social Security trust fund reserves to 2034 — nine years away. Without legislative intervention, that could result in a reduction to roughly 80% of scheduled benefits, potentially signaling a broader planning challenge for today’s workers. Plan sponsors can help by encouraging participants to account for any potential variability in their future benefit amounts.

Sponsors aren’t expected to predict legislative outcomes in Washington, but offering ways for participants to model around uncertainty may help them make more resilient decisions. As such they can offer educational tools that incorporate different Social Security income scenarios, or that stress-test their retirement plans under reduced benefit assumptions to help provide employees with a clearer picture of how different eventualities could impact them.

Location: The Geography of Affordability

The cost of retirement can differ dramatically depending on where someone lives. In light of the accelerated projected depletion of the combined Social Security trust funds, GoBankingRates analyzed the price of a “comfortable” retirement — defined as twice the cost of living — in each state, excluding Social Security income. The most expensive state? Hawaii, with an annual cost of $186,062. The most affordable state, by comparison, was West Virginia, coming in at $64,715 per year. This geographic variability underscores the importance of personalized financial education that helps participants think through not only how much to save, but where their savings can go furthest.

Longevity: A Blind Spot With Real Consequences

Perhaps the most overlooked factor in retirement planning is longevity itself. A TIAA Institute and GFLEC study found that more than 60% of adults either don’t know or underestimate how long the average 65-year-old is expected to live. Underestimating life expectancy can lead to inadequate savings, overly aggressive withdrawal strategies, or early benefit claims that don’t match the realities of a 25- to 30-year retirement.

Longevity is rarely discussed with the same precision as contribution rates or investment returns, yet it quietly reshapes both of them. For plan sponsors, this represents an opportunity — not to project individual outcomes, but to reinforce planning frameworks that can accommodate a wider range of retirement durations. Supporting tools and conversations that help surface longevity assumptions can lead to more grounded, realistic participant strategies.

Retirement readiness isn’t just about helping employees accumulate assets. It’s about equipping them to make decisions within an evolving retirement landscape shaped by variables that aren’t always captured in a spreadsheet. Sponsors who support context-aware planning can empower participants to make better informed, more resilient choices for the future.

Sources:

Guiding 60-Somethings Through the Final Stretch of Retirement Planning

Fri, 18 Jul 2025 20:58:20 GMT

Participants in their 60s are poised on the cusp of retirement, where every move can have big consequences. Plan sponsors have a critical opportunity to support late-career workers’ retirement planning efforts by providing relevant tools and communication strategies that help them make more informed choices during these critical years.

Promote “super catch-ups.” Participants aged 60 to 63 can accelerate savings while they’re still earning. A provision introduced under SECURE 2.0, allows eligible workers to contribute up to $11,250 in catch-up contributions — significantly more than the standard $7,500. Sponsors should proactively communicate this option to employees who are either within or approaching the qualifying age range and help them take advantage of the provision.

Turn attention to income. Many workers in their 60s are highly focused on how to turn their savings into a steady stream of income during retirement. Consider exploring guaranteed income options and assist participants through one-on-one advisory support to help them reduce the risk of outliving their savings.

Support phased retirement. For some older workers, easing into retirement makes more sense than stopping employment cold turkey. Phased retirement into part-time or consulting roles can help participants transition out of the workforce while maintaining income, extending benefit access, and staying engaged. Encouraging contributions past age 65 for those catching up on their retirement goals, offering flexible withdrawal strategies, and providing clear guidance on how benefits interact with continued employment can better support those shifting gradually into retirement.

Support financial wellness for 60-somethings. Segment communications to highlight relevant actions for this demographic. Provide education around decumulation strategies, planning for health care costs, and reducing high-interest debt before retirement.

Educate on Social Security timing. The age at which employees claim Social Security benefits can have a significant impact on their long-term retirement income. Claiming at age 62 results in permanently reduced monthly payments, while delaying up to age 70 can increase payments by as much as 8% per year. The decision also affects Medicare coordination and how long retirement savings must stretch. Providing clear, personalized education can help participants weigh the trade-offs and make more informed decisions based on their individual circumstances and financial goals.

Prepare for Roth catch-up rules affecting older, higher earners. Starting in 2026, employees aged 50+ earning more than $145,000 from the plan sponsor in the previous year must make catch-up contributions on a Roth basis. That includes many workers in their 60s — often their peak earning years and final opportunity to boost retirement savings. Sponsors should act now to ensure their plan is Roth-ready and that employees approaching retirement understand how the new rules may impact their savings strategy.

With thoughtful plan design and targeted support, sponsors can help older participants navigate the often-blurry transition between work and retirement by offering tools and flexibility that support a more personalized off-ramp.

Participant Corner: Don’t Leave Your Retirement Behind

Thu, 03 Jul 2025 20:33:46 GMT

Starting a brand-new new job is exciting and full of a lot of new benefits, but don’t forget about the retirement plan you left behind.

There are many different ways to handle an old retirement account and here are your four options:

Which Option is Right for You?

While there isn’t any definite answer, there are a few things you should consider before moving your old retirement plan. First, are you happy with your old plan’s performance? Has it grown since you first invested in it? Second, is your new plan better in terms of features and fees? Would it be worth moving it over? And lastly, do you prefer simplicity or control? Meaning, would you rather not worry about it and leave it in its current plan or move it somewhere that you can control its investments and outcome?

How to Take Action

Before you decide what to do with your plan, it’s worth taking a look at your balance. Log into your old plan and check the balance, especially if you are contemplating cashing it out. Once you’ve decided which route to take, contact your new Human Resources or plan provider and ask about the rollover process. They will be able to assist and guide you through this process.

Just because you changed your job doesn’t mean you need to change your retirement goals. Your retirement deserves to move with you, wherever you’re headed next.

Participant Corner: Four Basic Steps for a Successful Retirement

Wed, 18 Jun 2025 16:49:19 GMT

We understand that most retirement savers aren’t financial experts, and that can make preparing for retirement feel overwhelming. The good news is that achieving a successful retirement doesn’t have to be complicated. By following a few basic steps, you could set yourself up for long-term financial security.

Start Saving Now and Learn the Basics of Saving and Investing

The earlier you begin saving, the better your chances of reaching your retirement goals. It’s also important to understand the foundational concepts of saving and investing. Familiarize yourself with the different types of investment products, such as stocks, bonds, and money market accounts. Each comes with its own set of risks and potential rewards, and knowing how they work—and how they fit into your overall portfolio—can help you make informed decisions. Take time to understand the details of your retirement plan and the benefits it offers so you can make the most of it.

Avoid Common Mistakes

Many retirement savers fall into the same traps: failing to diversify their investments, neglecting to rebalance their portfolios, making emotionally driven decisions, or not having a clear investment strategy at all. One of the best ways to avoid these mistakes is by focusing on that last item—developing an investment plan. Having a well-thought-out approach to investing can help you stay disciplined and better positioned for long-term success.

Focus on Three Critical Components of an Investment Plan

While you can’t control the ups and downs of the market, there are three key factors you can control: when you start saving, how much you save, and when you plan to retire. Starting early and contributing consistently often has a bigger impact on your retirement outcome than investment returns alone. Choosing when to retire is also critical. Delaying retirement, even by a few years, can give your investments more time to grow and provide greater financial stability.

Monitor the Plan and Adjust as Necessary

A strong retirement plan isn’t static—it should evolve with you. Major life events such as a new job, a growing family, changes in income, or unexpected financial challenges should all prompt a review of your retirement strategy. Regular check-ins can ensure your plan remains aligned with your goals and helps keep you on track for the future you envision.

Looking for more information?

Contact the IRPC Team at info@irpcsp.com to learn more about our fiduciary support, plan design consulting, participant education resources, or anything else you need to strengthen your retirement plan.

June 2025 Retirement Times

Mon, 02 Jun 2025 19:07:09 GMT

Managed Accounts Offer a More Personalized Approach

Don’t Take Forfeitures for Granted

Basic Fiduciary Obligations for New Plan Sponsors

Reach out if you’d like the full edition or want help walking through the key takeaways with your committee.

4 in 10 Employees Cutting Back on 401(k) Contributions Amid Economic Uncertainty

Mon, 02 Jun 2025 18:12:55 GMT

Morgan Stanley retirement study findings released today show some employees tightening their belts; looking for more retirement planning assistance from employers

While more employees are participating in their workplace retirement plans, they are also responding to economic uncertainty by cutting back on their 401(k) contributions and looking for financial guidance through the workplace.

This according to just-released retirement findings from Morgan Stanley at Work’s fifth annual State of the Workplace Report, focused on HR and employee attitudes and priorities for retirement benefits amid increasing economic uncertainty. Morgan Stanley at Work , together with Morgan Stanley Institutional Consulting Solutions , which supports the retirement business, today announced retirement-focused data from the survey of 1,000 U.S.-employed adults and 600 HR leaders.

A key finding was that employees are indeed tightening their belts. While participation in 401(k) plans held steady year-over-year at 86%, financial stress is affecting retirement savings behavior. More employees are reducing 401(k) contributions specifically because they are concerned about economic impacts related to inflation or recession (39%, +3 percentage points year-over-year). This is particularly pronounced among Gen Z workers at nearly half (48%). Overall, 67% of employees say they are reducing their contributions across all savings accounts, up 4 percentage points since 2024.

The study found employees are looking for more comprehensive retirement guidance . When it comes to the most valued types of retirement planning assistance, access to a financial advisor is the top choice for employees, followed by goals-based retirement investment planning, and retirement income solutions. HR leaders ranked the same three choices among their top three (38% each)—showing clear consensus around the need for holistic support throughout the full retirement cycle.

Sixty-nine percent of HR executives believe access to retirement planning assistance from financial professionals is a top or high priority for employees when choosing where to work. A majority of employees agree (54%)—and even more so among those who participate in their company benefits (60%), who are also less likely to say that they need to accelerate their financial planning efforts to make up for lost time (82% vs. 90).

“In the face of economic uncertainty, it is clear that comprehensive retirement benefits are essential for individual financial security, while also serving as a critical lever to retain top talent,” said Jeremy France, Head of Institutional Consulting Solutions at Morgan Stanley.

“Our findings emphasize that modern workplace retirement plans go beyond simply offering a 401(k) and match; they now integrate ongoing financial advisory, investment planning and income solutions. This next generation of workplace retirement plans—especially those which include ongoing planning and consultancy support—are a strategic asset that can help companies foster employee loyalty and business stability in any environment,” France added.

Additional details are available in Morgan Stanley at Work’s State of the Workplace Study here . As part of a series of findings from Morgan Stanley at Work’s fifth annual study, the business will publish its findings on equity and financial benefits in the coming weeks.

Original publication by Brian Anderson https://401kspecialistmag.com/4-in-10-employees-cutting-back-on-401k-contributions-amid-economic-uncertainty/

Managed Accounts Offer a More Personalized Approach

Thu, 29 May 2025 18:43:29 GMT

Target-date funds have long played a vital role in giving American workers access to professional help when establishing and maintaining a diversified investment portfolio. However, the glide paths — the balance of stocks, bonds, and cash — that serve as the foundation for these platforms has traditionally been based on a single consideration: the participant’s projected date of retirement.

To be fair, target-date funds have played an important role in helping millions of novice (and even expert, but busy) retirement plan savers invest in broadly diversified portfolios overseen and rebalanced on a regular basis by professional investment managers. But the allocation of those investments between investment classes — the glide path — is still often based on that one demographic factor. Still, it’s no more precise than a broad five- or 10-year time frame that approximates a traditional retirement age — which may, or may not, apply.

That means, of course, that those investment allocations can be oblivious to key demographic considerations like gender (women tend to live longer), marital status (ditto married individuals), race, and health, as well as investment risk appetite and other means of retirement income support. In short, they can overlook the kind of things that would be considered if there were an opportunity to sit down in a one-on-one conversation with a financial advisor.

Enter managed accounts — a solution that considers an expanded array of personal considerations like those noted above. These accounts craft a more relevant, personalized portfolio based on individual variables that can have a huge impact on how a retirement investment portfolio is designed. Traditionally, this was done via a one-on-one interview with an individual. But these days much of this data can be found in payroll systems and/or may already be maintained in recordkeeping platforms — or fields present in standard wealth management programs.

The Potential Impact

A Morningstar study found that after using managed accounts, 72% of participants who were off-track in saving for retirement increased their savings rates. At median, this represents a 33% jump from what they were contributing previously, or about 2% of their salaries on average. Additionally, a larger number of off-track participants (12%) started contributing enough to receive the full employer match.

The study also found that after using managed accounts, participants’ assets were placed into portfolios that were more risk-appropriate. Moreover, the researchers noted “improved expected annual returns both in nominal and risk-adjusted terms.”

The Bottom Line

Managed accounts can provide retirement savers with a more personalized asset allocation — but not every managed account platform provides the same depth and level of customization. Additionally, that level of personalization comes at a price. Plan fiduciaries should carefully consider the cost, quality, and composition of those designs. They should also document how and why services were evaluated, selected, deemed necessary — as well as compensated — when adding a managed account option to their lineup.

Sources:
https://www.nytimes.com/2025/02/25/well/longevity-women-versus-men.html

https://fortune.com/2023/01/13/why-are-married-men-healthier-on-average-women-gender-research/

https://www.morningstar.com/lp/impact-of-managed-accounts-2022update

Basic Fiduciary Obligations for New Plan Sponsors

Thu, 29 May 2025 18:40:32 GMT

Threats of financial penalties and legal liabilities heighten the need for proper compliance with the Employee Retirement Income Security Act of 1974 (ERISA). Let’s go over the basics of what it means to be a fiduciary in an organization’s retirement plan.

What is a Fiduciary?

In basic terms, a fiduciary is a person or group in a company that is responsible for the retirement plan and does what is best for the participants in the plan. There can be three different kinds of fiduciaries in a plan:

Named Fiduciary: This person or group is named specifically in the plan rulebook. There can be multiple people to handle different tasks such as investments and reporting.
Appointed Fiduciary: A named fiduciary is allowed to assign fiduciary responsibilities to another person such as an investment manager to handle monetary decisions.
Functional Fiduciary: This is someone that isn’t appointed as a fiduciary on paper, but steps into the role. Even if they aren’t officially listed on the plan rulebook, they legally become a fiduciary.

Fiduciary Obligations

According to ERISA, there are 4 main duties of a fiduciary:

Acting in the best interest of the retirement plan participants, not the fiduciary’s or company’s.
Making careful and knowledgeable decisions involving retirement plans.
Don’t put your eggs in one basket. Spread out investments to reduce risks.
Follow the plan rulebook unless it goes against federal guidelines.

In addition to these main duties, there are additional tasks assigned to plan fiduciaries. Reporting, keeping records, and handling claims are large responsibilities that can result in major penalties if not completed correctly. To begin, fiduciaries need to annually file a Form 5500 with the government to be transparent with plan performance. Failing to do this can include up to $2,670 per day from the Department of Labor as well as IRS penalties. Keeping records related to the plan as well as sharing these records with participants will be important for any potential legal disputes that arise. Any claims made by participants about their retirement plans must also be handled by the plan fiduciary.

Plan fiduciaries carry a big responsibility, and it’s important to operate fairly for the sake of the plan participants as well as know the regulations to mitigate any future liability issues.

Source:
https://www.plansponsor.com/fiduciary-basics-for-new-plan-sponsors/

Employers, Workers Have Disconnect Between Employee Needs, Benefits Strategies

Thu, 15 May 2025 17:48:26 GMT

Day-to-day financial stress tops employee concerns, but most employers still focus on long-term retirement planning.

A growing divide separates what employees say they need from their workplace benefits and what employers provide, with everyday financial stress emerging as a top concern for U.S. workers, according to a Prudential Financial study released Tuesday.

The 2025 Benefits and Beyond study, shows that while 75% of employers surveyed believe their benefit offerings support retirement savings, only 35% say those same benefits help alleviate immediate financial pressures such as the cost of groceries, housing and generally making ends meet.

Among employees surveyed, 45% said saving for retirement was their top challenge. Other top concerns were the cost of everyday goods at 44%; housing at 29% and making it to their next paycheck at 26%. 

“Employees want benefits that go beyond traditional coverage and more completely address how they live and work,” said Michael Estep, president of Prudential Group Insurance, in a statement. “The workplace is at a tipping point, and there’s so much at stake for employers.”

The study also reported a perception gap between employers and employees. While 86% of employers believe they are offering modern benefits, just 59% of employees agree. And although 97% of employers claim employee well-being is a priority, only 69% of employees said they felt that way.

Employees are also increasingly interested in benefits that improve their work/life balance. For example, 41% of employees said they favored four-day work weeks and 23% supported time off for new pet owners, similar to paternity leave.

However, among employers, some 35% considered a four-day work week optimal and 17% supported time off for new pet owners.

The study, conducted via national online surveys, included responses from 2,946 full-time employees and 750 employers.

Prudential Financial Inc. manages approximately $1.5 trillion in assets as of December 31, 2024. Prudential Group Insurance distributes a range of insurance for use within employee and membership benefits plans.

Original article: https://www.plansponsor.com/employers-workers-have-disconnect-between-employee-needs-benefits-strategies/

Reported by James Van Bramer

Participant Corner | The Ultimate Guide to Tax Savings

Thu, 08 May 2025 15:27:22 GMT

As tax laws evolve and personal financial situations change, it's essential to stay informed about strategies that can help minimize your tax burden. Here are several tips to consider:

Maximize Retirement Contributions
Contributing to retirement accounts like 401(k)s and IRAs can reduce your taxable income. For 2025, the IRS has increased the 401(k) contribution limit to $23,500, while the IRA contribution limit remains at $7,000. If you're 50 or older, you may be eligible for additional catch-up contributions. These contributions not only bolster your retirement savings but also offer immediate tax benefits.
Consider a Roth IRA Conversion
Converting a traditional IRA to a Roth IRA involves paying taxes on the converted amount now, but it allows for tax-free withdrawals in retirement. This strategy can be advantageous if you anticipate being in a higher tax bracket in the future or if your current IRA investments have decreased in value, potentially reducing the tax impact of the conversion.
Harvest Investment Losses
To balance capital gains from other investments, think about selling any investments that have lost value. Tax-loss harvesting is a method that can lower your taxable income. The "wash-sale" rule, which forbids buying the same or nearly identical security again within 30 days of the sale, should be kept in mind.
Leverage Health Savings Accounts (HSAs)
If you're enrolled in a high-deductible health plan, contributing to an HSA can provide triple tax benefits: contributions are tax-deductible, growth is tax-free, and withdrawals for qualified medical expenses are tax-free. For 2025, the contribution limits are $4,300 for individuals and $8,550 for families, with an additional $1,000 catch-up contribution allowed for those aged 55 and older.
Optimize Charitable Giving
You can avoid capital gains taxes by donating appreciated assets, like stocks, directly to charitable organizations, or you can create a donor-advised fund, which enables you to make a charitable contribution, receive an immediate tax deduction, and then distribute funds to charities over time.
Plan for Gift and Estate Tax Changes
After December 31, 2025, the existing exemptions from the federal gift and estate taxes will be reduced. Consider tactics like giving assets to heirs now to lower the taxable value of your estate if it is above these limits. To learn more about possibilities like trusts or other estate planning tools, speak with a tax advisor.
Stay Informed on Tax Law Changes
Tax laws are subject to change, and staying informed can help you take advantage of new opportunities or adjust your strategies accordingly. Regularly consult with a tax professional to ensure your tax planning strategies remain effective and compliant with current laws.

Implementing these strategies can help you manage your tax liability more effectively. Always consult with a qualified tax advisor to tailor these tips to your specific financial situation.

*Withdrawals from Roth IRAs are tax-free if taken after age 59½ and at least five years after the conversion.

Sources:

May 2025 Retirement Times

Mon, 05 May 2025 16:02:05 GMT

Early Retirement: Dream or Dilemma?

Health care planning. When employees leave the workforce earlier than expected, nearly a third (31%) do so due to health issues. As such, integrating health care and retirement planning is an important consideration. Offering health savings accounts (HSAs) to employees enrolled in eligible high-deductible health plans (HDHPs) and providing education on Medicare and long-term care planning can help employees better prepare for the unexpected. Additionally, education on health insurance options for early retirees — including COBRA, ACA marketplace plans, and private insurance options — can help many workers bridge the gap until Medicare eligibility.

Flexible retirement options. Allowing employees to gradually reduce their workload while retaining benefits can provide greater financial stability and help them transition into retirement on a timeline of their choosing. Additionally, career development programs for pre-retirement employees, including skills training and even mentorship roles, can help keep them engaged, adaptable, and more financially prepared for their eventual exit. According to Mercer, 38% of companies support later-life working by making project-based or gig roles available to older employees, and 36% are offering part-time, flexible, or phased retirement choices.

Financial wellness programming. Plan sponsors should encourage employees to take an early, proactive approach to retirement planning and help them fully understand how timing affects their Social Security benefit. Even simple changes — like optimizing RMD strategies — can have a significant impact on financial security during retirement.

Guaranteed income solutions. As the retirement landscape continues to evolve, so do expectations around income sustainability. Guaranteed income solutions can help address these issues, but concerns about administrative complexity, fee transparency, and portability remain. Ultimately, determining whether these options are suitable requires careful evaluation of plan objectives, regulatory considerations, and participant needs.

Addressing the Timing Gap
The challenge for employers is clear: Supporting employees in their retirement journey requires a multipronged approach, from plan design to employment policies to financial wellness. By staying ahead of these trends, plan sponsors can not only help employees achieve a more secure retirement but also help strengthen their organization in the process.

Sources:
https://www.ebri.org/docs/default-source/rcs/2024-rcs

https://www.mercer.com/en-us/insights/people-strategy/future-of-work/reimaging-work-and-retirement/

Rising Hardship Withdrawals Putting Retirement at Risk

Provide one-on-one financial counseling. There’s simply no one-size-fits-all solution when it comes to promoting employee financial wellness. Each worker’s situation is unique, and the most appropriate and effective strategies will vary. For some, financial stability might be achieved through highly targeted budgeting interventions or lifestyle changes like moving or downgrading a car. Others may benefit more from debt restructuring or negotiating lower rates on high-interest credit card balances. Personalized financial counseling helps ensure employees receive guidance that’s tailored to their specific needs. Individual sessions can be particularly helpful for those who might understandingly be hesitant to disclose a financial hardship among their coworkers within a group education setting.

Encourage health savings. Since medical expenses are a significant cause of hardship withdrawals, employers can encourage the use of Health Savings Accounts (HSAs) for workers enrolled in qualified, high-deductible health plans (HDHPs). HSAs enable employees to build a fund to help cover future medical costs, while benefitting from triple tax advantages: tax-deductible contributions, tax-free growth, and tax-free withdrawals for qualified expenses. By providing employer contributions to HSAs and educating employees on their benefits, companies can help reduce the likelihood that workers will need to tap their retirement account for a health-related financial emergency.

Promote emergency funds. Consider encouraging employees to build emergency savings through pension-linked emergency savings accounts (PLESAs). Under SECURE 2.0, employers can auto-enroll non-highly compensated employees at up to 3% of their salary “unless the participant affirmatively elects a higher or lower percentage,” according to the DOL. The maximum account balance is $2,500, and participants are permitted to make withdrawals at least once per month. Whether through PLESAs, out-of-plan ESAs, or other personal savings strategies, employees should be encouraged to put aside at least three to six months’ worth of expenses in a low-risk, readily accessible account.

A Lifeline for Struggling Employees

The rise in 401(k) hardship withdrawals sends a loud and clear signal that employees are in need of additional financial support to help manage unexpected expenses. By offering personalized advice, promoting emergency savings, and discussing health savings options, plan sponsors can help employees stay on track with their retirement savings while navigating financial challenges. Taking action now not only helps benefit employees but can also foster a more financially stable, engaged, and productive workforce.

Sources:
https://www.wsj.com/personal-finance/retirement/401k-retirement-emergency-savings-americans

https://www.irs.gov/retirement-plans/retirement-plans-faqs-regarding-hardship-distributions

https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/faqs/pension-linked-emergency-savings-accounts

Market Turmoil Spurs Trading, but Staying Put Pays Off

Initially, as the S&P 500 hit record highs through mid-February, 401(k) investors favored equities. However, as market conditions worsened, many shifted their investments into fixed income funds. Alight noted that 29 out of 60 trading days in Q1 saw above-average trading levels. Target-date funds, large-cap U.S. equity funds, and small-cap U.S. equity funds were the most actively traded asset classes.

Rob Austin, head of thought leadership at Alight Solutions, explains that while market drops may feel alarming, they are not unusual. He points out that investors often react by selling stocks during downturns and moving into fixed income. “They’re definitely not buying stocks when they’re on sale … and they don’t tend to get back into the market until equities have gone up,” he says. “So in other words, … they’re selling low, buying high. Not the perfect recipe for investing.”

Despite increased activity, Austin notes that less than 1% of participant assets were actually traded, indicating that most investors are sticking with their long-term strategies. He recommends that participants not already in target-date funds or managed accounts consider periodic rebalancing—ideally through automatic plan features. Although around 70% of defined contribution plans offer auto-rebalancing, only about 10% of participants take advantage of it.

For those nearing retirement, Austin reassures that unless their portfolios are heavily weighted in equities, recent market losses have likely had only a muted effect, thanks to the gradual derisking built into many glidepaths.

Communication Strategies for Plan Sponsors

For plan sponsors, effectively communicating with participants approaching retirement can be challenging. They cannot offer direct investment advice but can encourage prudent, long-term thinking.

“I think plan sponsors are generally trying to get people [who are in] the pre-retirement phase … to think about derisking,” Austin says. “It’s tough to make that message now, because you don’t want people to lock in those losses especially when they don’t have the time to make that up in the next few years.”

Austin suggests that sponsors should focus on reminding participants about derisking strategies without encouraging them to lock in paper losses unnecessarily.

Generational Differences in Reaction

Joe Coughlin, director of MIT’s AgeLab, notes that participants between ages 55 and 62 are likely to react most strongly to market volatility. Many may feel pressured to delay retirement to recover from losses, potentially extending their time in the workforce. In response, Coughlin predicts that older employees will increasingly demand flexible work arrangements—similar to trends previously associated with younger generations.

“In fact, what’s kind of ironic is they may start to echo younger workers in a greater way than we’ve ever expected,” Coughlin says. “Everyone was busting on Gen Z and Millennials about [wanting] to work from home, but I think this [older] group is going to react by saying ‘I need to stick around longer to make sure that my wealth span is not shorter than my lifespan, … which means I need a little bit more flexibility.”

According to Coughlin, as the market continues to shift, Gen Z and Millennial employees may begin to lose faith in their companies and organizations and grow increasingly skeptical of benefits and retirement plans.

“While one generation may be reactive, the other one is taking it to heart and learning,” Coughlin says.

Sources:
https://www.plansponsor.com/401k-participants-show-high-trading-activity-amid-market-volatility/

Retirement Confidence Remains High Despite Concerns About Inflation, Social Security

Tue, 29 Apr 2025 17:36:34 GMT

EBRI research found that most Americans are confident about retiring, but 79% of retirees and 71% of workers expressed concern about changes to Social Security.

A majority of American workers and retirees both remain confident about their retirement and have concerns about inflation and potential cuts to Social Security, according to the 2025 Retirement Confidence Survey, conducted by the Employee Benefit Research Institute and Greenwald Research, released Thursday.

EBRI’s survey, conducted from January 2 through February 3, included responses from 2,767 Americans, nearly evenly split between workers and retirees.

According to the survey, 67% of workers and 78% of retirees reported being confident that they could live comfortably throughout retirement. Retiree confidence increased four percentage points year over year , while worker confidence slipped one percentage point from last year’s survey.

Surveyed workers and retirees also expressed increasing concern about changes to the retirement system, as cuts to Social Security and Medicare benefits appear likely because of the budget resolution passed by Congress earlier this month.

The budget resolution targets a significant tax cut and a sizeable decline in federal spending, which more than likely will affect federal benefits.

“If you start changing those programs that retirees are so reliant on, there’s going to be concern and therefore a lot of times these issues fall under third-rail politics,” says EBRI’s director of wealth benefits research, Craig Copeland, noting that the survey was conducted prior to the budget resolution.

Of those surveyed, 79% of workers and 71% of retirees reported being at least somewhat concerned about Social Security and Medicare, according to the study.

Further, 60% of workers and 80% of retirees said they expect changes could reduce their Social Security benefits, with 80% of retirees also concerned about a decline in their Medicare benefits, the survey found.

The concerns likely do not come as a surprise among Social Security beneficiaries aged 65 and older; 12% of men and 15% of women rely on Social Security for at least 90% of their income, according to a Social Security Administration fact sheet .

In EBRI’s study, 94% of retirees reported Social Security as a source of income, and 87% of retirees said they expect the program to serve as a source of income in retirement.

Workers also reported being troubled by market volatility and rising health care costs. According to the EBRI study, 70% of workers fear they will need to significantly reduce spending due to inflation, stock market instability and soaring housing prices.

In addition, more than half of workers said rising medical expenses are making it harder to save for retirement. Meanwhile, 40% of retirees said their health care costs in retirement are higher than they anticipated.

In response, workers reported planning to delay retirement or continuing paid work after retirement. EBRI’s study found that 20% of workers in 2024 delayed their expected retirement. Still, expectations do not always match reality, since 60% of retirees reported having left the workforce before age 65, with the median retirement age of respondents landing at 62.

Guaranteed Income Gains Attention

Amid this uncertainty, many workers are turning to guaranteed income products to help ensure financial stability in retirement.

Roughly 30% of respondents with workplace retirement plans said guaranteed lifetime income options would be a top improvement to their plan. Nearly 70% of those surveyed find it appealing if plans have default investments that include guaranteed income, according to the survey.

The study also found that while many seek advice, professional guidance remains underutilized. Fewer than half of respondents reported working with a financial adviser, though 80% of retirees and 75% of workers surveyed said they have access to helpful financial resources. At the same time, 40% of workers and 20% of retirees said they were unsure where to find trustworthy financial advice.

Despite these challenges, confidence in the financial services industry remains strong: About 70% of respondents reported they believe financial companies understand how to support them in retirement and financial planning, according to EBRI’s survey.

Original Source: https://www.plansponsor.com/retirement-confidence-remains-high-despite-concerns-about-inflation-social-security/?utm_source=newsletter&utm_medium=email&utm_campaign=Newsdash&oly_enc_id=5912I5591689C8Z

Participant Corner: How Much Do You Know About Your Retirement Plan?

Thu, 10 Apr 2025 15:45:11 GMT

Many people often find that they know far less about their retirement plan than they thought. Test yourself with the quiz below and see how much you know about your financial future.

1. What type of retirement account do you have with your employer?

401k
403b
457b

Depending on your industry your retirement account will look different. As a rule of thumb, for-profit companies tend to have 401(k)s while non-profits typically use 403(b)s. State government jobs tend to be 457(b)s. These are not hard rules however and it's important to reach out to your plan sponsor to find out what plan you are involved in.

2. How risky are your investments?

Aggressive
Moderate
Conservative

Once your money is in a tax-deferred retirement account, you need to choose how to invest it. Choosing how aggressively to invest that money is important. Depending on how much you contribute relative to your income as well as how close you are to your retirement, different levels of risk are best to maximize your retirement returns. If you are early in your career or make smaller contributions, a more aggressive strategy will grow your nest egg faster (albeit with more risk involved). On the other hand, if you are later in your career or are making bigger contributions, you do not need your money to grow as much to have a secure retirement, so a more conservative strategy is more suitable.

3. Do you know the employer match limit for your retirement account (if they have one)?

Finding out your employer's match limit is important. If you contribute less than that number, you are missing out on “free” money to put away for your retirement. Ensuring you contribute at least that much will allow you not to leave anything on the table.

4. Who is your Beneficiary?

Spouse
Child(ren)
Sibling(s)

Many people are unaware of who the beneficiary of their retirement account is in the event they were to pass on. If they are married, then the default is their spouse and if someone is single then the account is included in their estate. Naming a beneficiary is typically very easy to do and can save your loved ones a significant amount of time and money in their time of mourning.

Questions like the ones above are essential to understanding and maximizing the benefits of your retirement plan. If you're unsure about one or more of these key areas, don’t hesitate to reach out.

At Ironwood Retirement Plan Consultants, we’re here to help. Whether you're looking for clarity or ready to take the next step, contacting your advisor or plan sponsor is the best way to get personalized guidance and answers tailored to your retirement goals.

Timing the Market Is Impossible

Tue, 08 Apr 2025 14:19:11 GMT

In times of volatility, timing the market may seem tempting. But doing so could cost you.

A historical perspective of the market shows us a pattern of bull and bear markets that may be tempting to investors. Why not try to time the market and avoid those short-lived bear markets? Wouldn’t that be more lucrative? Unfortunately, it’s impossible and could be a costly mistake.

Avoiding the market’s downs may mean missing out on the ups as well. Seventy-eight percent of the stock market’s best days have occurred during a bear market or during the first two months of a bull market. If you missed the market’s 10 best days over the past 30 years, your returns would have been cut in half. And missing the best 30 days would have reduced your returns by an astonishing 83%.

Talk to your financial professional so you can feel confident investing in bull and bear markets alike.

S&P 500 Index is a market capitalization-weighted price index composed of 500 widely held common stocks.

Important Risks: Investing involves risk, including the possible loss of principal.

Source: https://www.hartfordfunds.com/practice-management/client-conversations/managing-volatility/timing-the-market-is-impossible.html?emailID=48433&mkt_tok=ODYxLVJXUy02OTkAAAGZRDysnOLD6F1X9HfE6GyXgHkpR9PXk-e-AnzXKGbcCVA1uXr0enJvnXVamIoBjL5CoRa6FcsRgQKcCYTkJc-U5QkMxizTf2uX94weFdLhqMP3rw&programID=10078&utm_campaign=2025-03-17-SUB-CC-Timing_the_Market_Is_Impossible&utm_content=practice_management&utm_medium=email&utm_source=hartfordfunds.com

Save for retirement now, get a tax credit later: Saver’s Credit can help low- and moderate-income taxpayers save more in 2025

Mon, 07 Apr 2025 14:59:04 GMT

IR-2024-298, Nov. 25, 2024

WASHINGTON —The Internal Revenue Service today reminded low- and moderate-income taxpayers that they can save for retirement now and possibly earn a tax credit in 2025 and future years.

The Retirement Savings Contributions Credit, also known as the Saver’s Credit , helps taxpayers offset a portion of the first $2,000 ($4,000 if married filing jointly) they voluntarily contribute to Individual Retirement Arrangements (IRAs), 401(k) plans and similar workplace retirement programs.

The credit also helps eligible persons with a disability who are the designated beneficiary of an Achieving a Better Life Experience (ABLE) account and contributes to that account. For more information about ABLE accounts, see Publication 907, Tax Highlights for Persons with Disabilities , on IRS.gov.

The maximum Saver’s Credit is $1,000 ($2,000 for married couples). The credit can increase a taxpayer’s refund or reduce the tax owed but is affected by other deductions and credits. Rollover contributions do not qualify for the credit, and distributions from a retirement plan or ABLE account reduce the contribution amount used to figure the credit.

Who is eligible?

Taxpayers can use the Interactive Tax Assistant tool for the Saver’s Credit to determine their eligibility. A taxpayer is eligible for the credit if they’re:

Age 18 or older,
Not claimed as a dependent on another person’s return, and
Not a full-time student.

Furthermore, the Saver’s Credit can be claimed by:

Married couples filing jointly with adjusted gross incomes up to $76,500.
Heads of household with adjusted gross incomes up to $57,375.
Married individuals filing seperately and singles with adjusted gross incomes up to $38,250.
Qualified surviving spouse filers.

Contribution deadlines

Individuals with IRAs have until April 15, 2025 - the due date for filing their 2024 return - to set up a new IRA or add money to an existing IRA for 2024. Both Roth and traditional IRAs qualify.

Individuals with workplace retirement plans still have time to make qualifying retirement contributions and possibly get the Saver’s Credit on their 2024 tax return. Contributions to workplace retirement plans must be made by December 31 to a:

401(k) plan.
403(b) plan for employees of public schools and certain tax-exempt organizations.
Governmental 457 plan for state or local government employees.
Thrift Savings Plan (TSP) for federal employees.

See the instructions to Form 8880, Credit for Qualified Retirement Savings Contributions , for a list of qualifying workplace retirement plans and additional details. Finally, visit the Saver’s Credit page on IRS.gov to learn about rules, contribution rates and credit limits.

Tax credits like the Saver’s Credit can vary based on your income and contributions. We recommend speaking with your tax professional to ensure you're making the most of what’s available.

Source: https://www.irs.gov/newsroom/save-for-retirement-now-get-a-tax-credit-later-savers-credit-can-help-low-and-moderate-income-taxpayers-save-more-in-2025

The Retirement Planning Gap Affecting Two in Three Investors

Fri, 04 Apr 2025 14:31:37 GMT

Despite the importance of retirement planning, a staggering 67% of investors admit to spending no time at all working on it in a typical month, according to a recent survey conducted by the Nationwide Retirement Institute. That’s a vast majority of investors failing to take even small steps toward securing their financial future. For plan sponsors, this presents both a challenge and an opportunity.

Not Just a Problem for Younger Generations

One might expect pre-retirees to be more engaged in retirement planning, yet the data shows that 53% of investors ages 55 to 65 still spend zero time in a typical month on it. While 47% of pre-retirees are taking action, the fact that more than half remain disengaged is concerning. This group is at a critical point where informed decisions on saving, Social Security, and investment strategies can make or break retirement readiness.

Plan sponsors can play a key role in bridging this gap by facilitating regular retirement readiness check-ins and retirement planning workshops, as well as promoting the benefits of catch-up contributions. Employers can also initiate targeted communications and provide resources to support retirement income planning, including guidance on timing Social Security benefits and implementing retirement distribution strategies.

Shifting Expectations

The Nationwide study indicates that the past five years have reshaped retirement expectations for 61% of investors, potentially a reflection of economic turbulence. Additionally, 46% of investors surveyed say they’ve delayed, changed, or canceled retirement plans due to economic conditions.

This means many participants may be rethinking their timelines and financial goals. Employers can provide critical support by offering flexible retirement options, recognizing that retirement doesn’t have to be an all-or-nothing decision. Phased retirement programs can allow employees to gradually transition out of the workforce, giving them more options as their retirement window starts closing.

Meeting Participants Where They Are

While automated savings strategies like auto-enrollment and auto-escalation are important, additional measures can help support those who may be overwhelmed or hesitant about investment risk. For example, traditional target date funds (TDFs) provide simplified portfolio management and help manage risk by gradually shifting asset allocations to more conservative investments as participants near retirement. But some newer TDFs offer even greater flexibility, offering multiple risk models to better align with participants’ diverse financial situations and risk preferences. More personalized options can help give uncertain investors the confidence to take the first step toward meaningful retirement preparation.

Too many investors put their future at risk by failing to actively engage in retirement planning. A proactive approach can move hesitant investors off the sidelines, empowering them to make informed decisions that help guide them toward greater financial security.

Sources
https://www.nationwide.com/financial-professionals/blog/research-learning/articles/a-look-at-the-state-of-retirement-planning-across-the-country

Retirees Take the Gold Watch, But Keep Their 401k Assets In-Plan

Fri, 04 Apr 2025 14:28:53 GMT

A recent Fidelity report reveals that over 80% of plan sponsors prefer to allow employees to keep their assets in-plan and withdraw them over time. The number of workers aged 55 and older has increased by 74% over the past two decades, prompting plan sponsors to focus more on how participants transition from saving for retirement to living in it.

60% of retirees using Fidelity's platform stayed in their employer-sponsored plan within the first year after quitting their jobs as of December 2022, a 10% increase since 2013. Pre-retirees (those between the ages of 50 and 59) exhibit a similar pattern, with record-kept assets for those over 50 tripling in the last ten years.

According to the report, "[Retirees and pre-retirees] may be choosing to stay in plan for a number of potential reasons… The simplification and consolidation of their retirement accounts, familiar and well-priced investment options, potentially lower fees, access to managed portfolio services and advice, educational content, or recordkeeper familiarity."

Additionally, 62% of plan sponsors consider offering retirement income options at least somewhat important. In order to give retirees a steady income, many are looking into target-date funds with guaranteed income through annuity purchasing choices.

These products gained traction following regulatory changes in 2019. In fact, a separate report from Sway Research found that target-date collective investment trusts with annuity components now exceed $22 billion in assets. Fidelity is among the recordkeepers offering BlackRock’s LifePath Paycheck products, which hold the largest share of these assets. Fidelity also found that 23% of plan sponsors currently offer guaranteed income options within defined contribution plans at retirement. Less common are managed payout funds, annuities participants can purchase during their working years, and guaranteed income marketplaces outside of defined contribution plans, which allow participants to allocate rollover assets.

More than half of plan sponsors offer ad hoc withdrawals, while about a third provide managed accounts designed to help generate retirement income. To analyze defined contribution trends, Fidelity examined data from 25,000 corporate retirement plans covering 23 million participants, 10,000 403(b) plans, and plan sponsor surveys conducted last year.

Sources
https://www.ignites.com/c/4767714/644054/more_retirees_take_gold_watch_leave_assets

April 2025 Retirement Times

Tue, 01 Apr 2025 14:16:46 GMT

The Power of Small Data for Retirement Plan Sponsors

As a plan sponsor, you probably spend a fair amount of time dealing with it one way or another — whether you’re gathering, analyzing, or reporting it. And for good reason, given the intrinsic value of data-driven decision making.

Much of this data exists on a macro level, including market trends, economic reports, white papers published by asset managers, and industry benchmarks. But how well are you leveraging small data available right within your own organization?

Small Data, Big Opportunities

Data doesn’t have to be big to be meaningful. Plan-level insights derived from participation and deferral rates or financial wellness utilization metrics are likely to be more relevant and actionable to you than broad industry statistics like the median U.S. retirement account balance. After all, your participant data may differ significantly from industry or national averages, and it’s what matters most to you as a plan sponsor.

But what about even more specific data? Take, for example, the employee who tells an HR rep they adjusted their contributions after a financial wellness seminar, or the retiree who informs a benefits manager that they keep assets in the plan because of strong service? While a single comment shouldn’t dictate major plan decisions, evaluating participant-level qualitative data can reveal not just what is happening with plan performance, but why it’s happening.

Where Can You Uncover Small Data?

Small data is often hiding in plain sight, embedded within everyday interactions and operational details. Key sources, keeping in mind anonymous collection to protect privacy, might include:

Utilization metrics, such as the most-read financial education blogs or most-accessed online retirement planning tools.
Employee feedback collected from HR and benefits surveys, onboarding sessions, and exit interviews.
Questions employees ask during retirement planning sessions. Even casual encounters can yield meaningful

information, such as when an employee mentions delaying retirement due to worries about inflation or expresses confusion about their investment choices.

Using Small Data

Small data can help you form hypotheses about new type(s) of financial education and support to offer. It can also help shape participant “personas” or cohorts based on shared financial needs or attitudes rather than broad generational labels. If you notice a trend in small data, the next step could be conducting micro-surveys – or brief one-question pulse surveys to get real-time feedback from a larger subset of employees. Insights from these assessments, combined with other small data points, can help you refine messaging, adjust plan features, and develop targeted interventions to boost engagement.

Plan sponsors should also consider sharing small data with their retirement plan advisor, who can then explore findings more directly in group and individual sessions. Advisors can provide additional context, validate trends, and suggest adjustments that may be beneficial. By thinking beyond benchmarks and zooming in on small data, organizations can better gauge participant needs and take relevant, meaningful action to help improve plan outcomes.

Source: https://hbr.org/2018/10/help-your-team-understand-what-data-is-and-isnt-good-for

The Retirement Planning Gap Affecting Two in Three Investors

Not Just a Problem for Younger Generations One might expect pre-retirees to be more engaged in retirement planning, yet the data shows that 53% of investors ages 55 to 65 still spend zero time in a typical month on it. While 47% of pre-retirees are taking action, the fact that more

than half remain disengaged is concerning. This group is at a critical point where informed decisions on saving, Social Security, and investment strategies can make or break retirement readiness.

Shifting Expectations

Meeting Participants Where They Are

With so many investors neglecting retirement planning, engagement efforts need to be proactive, frequent, and accessible. Plan sponsors can leverage a variety of strategies, including personalized omnichannel communications that speak to different life stages and financial concerns. Tailored messaging based on career stage, income level, retirement goals and timelines can help ensure relevance and boost engagement. While automated savings strategies like auto-enrollment and auto-escalation are important, additional measures can help support those who may be overwhelmed or hesitant about investment risk. For example, traditional target date funds (TDFs) provide simplified portfolio management and help manage risk by gradually shifting asset allocations to more conservative investments as participants near retirement. But some newer TDFs offer even greater flexibility, offering multiple risk models to better align with participants’ diverse financial situations and risk preferences. More personalized options can help give uncertain investors the confidence to take the first step toward meaningful retirement preparation. Too many investors put their future at risk by failing to actively engage in retirement planning. A proactive approach can move hesitant investors off the sidelines, empowering them to make informed decisions that help guide them toward greater financial security.

Sources: https://www.nationwide.com/financial-professionals/blog/research-learning/articles/a-look-at-the-state-of-retirement-planning-across-the-country

Retirees Take the Gold Watch, But Keep Their 401k Assets In-Plan

According to the report, “[Retirees and pre-retirees] may be choosing to stay in plan for a number of potential reasons… The simplification and consolidation of their retirement accounts, familiar and well-priced investment options, potentially lower fees, access to managed portfolio services and advice, educational content, or recordkeeper familiarity.

”Additionally, 62% of plan sponsors consider offering retirement income options at least somewhat important. In order to give retirees a steady income, many are looking into target-date funds with guaranteed income through annuity purchasing choices.

Sources: https://www.ignites.com/c/4767714/644054/more_retirees_take_gold_watch_leave_assets

Achieving a comfortable and secure retirement requires careful planning and disciplined financial habits. Here are five essential

strategies to help you succeed:

1. Start Saving Early and Consistently

The earlier you begin saving for retirement, the more you can take advantage of compound interest. Contributing regularly to retirement accounts like a 401(k) or IRA can significantly boost your savings over time. Even if you start later, maintaining consistent contributions is crucial.

2. Develop a Comprehensive Retirement Plan

A clear retirement plan should include estimated expenses, income sources, and long-term financial goals. This roadmap helps ensure that your savings align with your desired lifestyle. Regularly reviewing and adjusting your plan can keep you on track.

3. Manage Debt Effectively

Reducing debt before retirement can ease financial strain and free up funds for essential spending. To prevent needless financial hardship, give priority to paying off high-interest debts like credit cards and personal loans.

4. Diversify Income Streams

Social Security alone might not be enough to cover expenses. To increase your retirement assets and guarantee more financial stability, consider other sources like investments, part-time employment, or annuities.

5. Consult a Financial Professional

Working with a financial advisor can help you create and manage a solid retirement strategy tailored to your needs. A professional can offer insights on saving, investing, and managing risks to secure your financial future.

By implementing these strategies, you can build a more secure and fulfilling retirement, giving you financial peace of mind in your later years.

Sources:

https://www.kiplinger.com/retirement/keys-to-retirement-planning-and-peace-of-mind

https://www.dol.gov/sites/dolgov/files/ebsa/about-ebsa/our-activities/resource-center/publications/dol-top-10-ways-to-prepare-for-retirement-booklet-2023.pdf

JPMorgan Sued Over Cost of Generic Drugs in Health Plan

Mon, 24 Mar 2025 16:48:34 GMT

The defendants claim the company breached its ERISA fiduciary duty by putting business interests ahead of the plan and its participants.

Current and former participants in the JPMorganChase health insurance plan for employees have sued JPMorgan Chase & Co. and JPMorgan Chase Bank and company executives and committees, alleging breaches of fiduciary duties under the Employee Retirement Income Security Act for how they allege the company mismanaged its prescription drug benefit under its health insurance offering.

The case, Seth Stern et al. v. JPMorgan Chase & Co. et al., was filed Thursday in the U.S. District Court for the Southern District of New York. The plaintiffs are Seth Stern, Angela Bindner and Marianne Schmitt. Defendants include the company, the bank, its U.S. benefits executive, the company board’s compensation and management development committee, and Bernadette J. Branosky, Stephen B. Burke, Linda B. Bammann, Todd Combs and Virginia Rometty, all members of the board of directors.

JPMorgan could not be reached Friday for comment.

The complaint claims the defendants breached their fiduciary duties by “agreeing to grossly inflated prescription drug prices, costing the JPMorgan Plan and its participants/beneficiaries millions of dollars through higher payments for prescription drugs, higher premiums, higher out-of-pocket costs, higher costs, higher deductibles, higher coinsurance, higher copays and suppressed wages.”

The plaintiffs’ filing states that the defendants’ mismanagement led to the plan paying its pharmacy benefits manager—CVS Caremark, which is not a defendant in the case—too much for many generic drugs, which the complaint claims are widely available for less. In particular, the suit cites as an example the $6,229 price the plan’s participants paid for a 30-unit supply of the drug teriflunomide (the generic version of the drug Aubagio). The plaintiffs’ complaint states that the same supply of the same drug is available, without insurance, at retail and online pharmacies for prices between $32.96 and $11.05.

“No prudent fiduciary would agree or allow for its plan and participants/beneficiaries [to] pay a price that is more than two hundred times higher than the price available” at retail, the complaint states. The filing adds that the price disparities continue across all 366 generic drugs across the plan’s formulary.

The case was filed after the Federal Trade Commission , in January, issued a second report in as many years, finding that the three big U.S. PBMs have marked up drug prices.

The FTC issued its first interim report in July 2024 and, a few months later, filed an administrative lawsuit against the “big three” PBMs—Caremark Rx, Express Scripts and Optum Rx—and their affiliated group purchasing organizations.

Under the Consolidated Appropriations Act of 2021, plan sponsors are required to attest that the fees they pay for health care plans are fair and reasonable. As a result, it is important that plan sponsors apply a fiduciary process when evaluating their health plans, including pharmacy benefit managers, as well as remain aware of any pending litigation involving the providers.

The ERISA Industry Committee called on Congress last September to deem PBMs as fiduciaries under ERISA, as they play a significant role in negotiating prescription drug costs for plan sponsors managing health plans. Congress has not yet taken any action on the issue.

The suit against JPMorgan states that the company pays CVS Caremark about $3 million annually in administrative fees, in addition to the fees that Caremark collects for prescriptions.

The plaintiffs are seeking “appropriate” damages, to have the suit deemed a class action, and to have the defendants make the plan whole for all losses resulting from the claimed fiduciary breaches. They have also asked that an independent fiduciary be appointed to run the plan and that the PBM be replaced.

The plaintiffs are represented by the New York-based law firm Cohen Milstein Sellers & Toll and Washington, D.C.-based Fairmark Partners.

Original source: https://www.plansponsor.com/jpmorgan-sued-over-cost-of-generic-drugs-in-health-plan/

Reported by: Amy Resnick

JPMorgan Sued for Including ‘Underperforming’ Stable Value Fund in 401(k) Menu

Mon, 24 Mar 2025 16:39:02 GMT

The company was accused of using an in-house stable value investment that underperforms competitors.

A former employee of JPMorgan Chase Bank N.A. filed a complaint against the company last week, arguing that a stable value investment in the bank’s 401(k) plan performed poorly when compared with other available stable value funds.

In Gonzalez v. JPMorgan Chase Bank N.A. et al., filed in U.S. District Court for the District of New Jersey, plaintiff Alexandro Gonzalez claimed that JPMorgan Chase Bank failed to objectively and adequately review the plan’s investment offerings, initially and on an ongoing basis, with due care to ensure each investment option was prudent in terms of performance.

As of the end of 2023, the plan had more than $44 billion in assets under management and 295,407 participants. Gonzalez’s complaint argues that, as a jumbo plan, the plan had substantial bargaining power regarding the fees and expenses charged against participants’ investments.

According to the lawsuit, fiduciaries at JPMorgan allowed substantial assets in the 401(k) plan to be invested in the JPMorgan Stable Value Fund that invested in synthetic guaranteed investment contracts offered by MetLife, Prudential Financial, Transamerica and Voya Financial.

GICs are issued by insurance companies in the form of a fixed annuity contract.

“A prudent fiduciary would not have included this underperforming investment option that also carried significantly more risk than other investment options that had similar goals, i.e., preservation of investment assets,” the complaint states.

The complaint also states that a more prudent fiduciary could have demanded higher crediting rates from the insurance companies by submitting requests for proposals to the insurance companies and other providers of stable value investments.

In addition, the plaintiff alleges that the insurance companies “benefited significantly” from participants in the plan investing in the stable value fund. The complaint states that the crediting rates the insurance companies provided to the plan “were and are so low that the insurance companies reaped a windfall on the spread.”

The complaint also accuses JPMorgan of failing to monitor its investment committee to ensure that it was adequately performing its fiduciary obligations under the Employee Retirement Income Security Act.

The plaintiff is asking the court to declare that JPMorgan breached its fiduciary duties under ERISA and order the company both to disgorge all profits received from the plan and to make good on all plan losses resulting from “imprudent investment of the plan’s assets,” among other demands.

Gonzalez is represented by law firm Capozzi Adler P.C. in the case.

JPMorgan declined to comment on the lawsuit.

The bank was also sued last week by current and former health plan participants who allege the company mismanaged the prescription drug benefit under its health insurance offering.

Source: https://www.plansponsor.com/jpmorgan-sued-for-underperforming-stable-value-fund-in-401k-menu/

Reported by: Remy Samuels

Participant Corner: Maximize Your Employer Match in 2025

Wed, 12 Mar 2025 15:33:34 GMT

Leveraging your employer’s retirement plan match is one of the easiest ways to boost your financial wellness. With over 50% of employers offering some level of matching, it’s an opportunity you don’t want to miss. Here’s how to make the most of it.

Understand the Details of Your Plan

If you’re unclear about your employer’s retirement plan offerings, now is the perfect time to get the full picture. Reach out to your HR department for a detailed explanation of the benefits. Companies typically match contributions in various ways, some may offer a dollar-for-dollar match, while others match a percentage of your contributions. Knowing the maximum match contribution your employer provides will help you decide whether to save only up to that point or beyond.

Go Beyond the Match

While it’s essential to take full advantage of your employer's match, don’t stop there. Contributing more than the match can significantly impact your retirement savings, thanks to compound growth. Contributions to retirement accounts, such as 401(k) plans, grow tax-free until withdrawal, allowing your savings to accumulate faster over time.

Confirm Your Enrollment

Don’t assume you’re automatically enrolled in your employer’s retirement plan. While some companies auto-enroll new employees, others may require you to opt in. Double-check your status to ensure you're actively participating in the plan and receiving the employer match.

Also, pay attention to any vesting schedules associated with the employer match. A vesting schedule determines how long you need to remain with the company to fully own the matching contributions. For example, if your employer uses a five-year vesting schedule, you’ll need to stay employed for that period to keep all matching funds.

Secure Your Financial Future

Taking full advantage of your employer’s retirement plan matching program is a simple yet powerful step toward financial wellness. These contributions can provide a substantial start on building a comfortable nest egg, especially when combined with your own efforts to save. Start the year off right by prioritizing your financial health. Make the most of your company’s retirement plan in 2025 and set yourself up for a brighter future.

Source: https://insights.rpag.com/participant-corner-maximize-your-employer-match-in-2025

March Retirement Times

Sat, 01 Mar 2025 13:44:44 GMT

Helping Gen Xers Weather a Perfect Storm

Generation X — comprising those born between 1965 and 1980 — faces unique financial and social pressures that have left almost half of them with no retirement savings. Compounding these challenges, only 1 in 10 Gen Xers plans to delay filing for Social Security until age 70 to maximize their benefit, due in part to concerns about the program’s long-term solvency. For plan sponsors, providing tools and resources tailored to this generation’s needs can play a crucial role in helping them take meaningful and measurable steps toward retirement readiness.

Stuck in the Middle

Generation X often finds itself as the “sandwich generation,” attempting to balance financial responsibilities for both aging parents and dependent children. According to the Pew Research Center, 54% of individuals in their 40s are managing these dual caregiving roles, leaving less room to prioritize retirement savings. High levels of debt — including mortgages, student loans and credit cards— can further limit their ability to save. Plan sponsors can provide critical support by offering financial wellness programs to help participants manage competing priorities. Resources that focus on debt reduction, budgeting and emergency savings can help employees work toward freeing up income for retirement savings.

Troubling Numbers

Economic instability during critical earning years has left many Gen Xers with insufficient savings. The Great Recession delayed savings for many. According to a 2024 Vanguard report, the average 401(k) balance for individuals aged 45 to 54 stands at $168,646, with a median of just $60,763. Plus, the decline of traditional pension plans, which many Boomers depended on, means that Gen Xers must rely heavily on defined contribution plans and personal savings to fund their retirement. Plan sponsors can encourage catch-up contributions for those 50 and older and connect participants with financial advisors to explore strategies for making the most of their remaining earning years. These strategies can help augment their retirement savings and strengthen their financial position.

Uncertainty and Risk Aversion

Market volatility and past financial crises have left many Gen X investors cautious, impacting their willingness to take on the level of risk required for significant portfolio growth. At the same time, rising health care costs and uncertainty surrounding the future of Social Security benefits have added layers of anxiety about retirement. Without adequate emergency funds, some participants also withdraw early from their retirement accounts to cover unexpected expenses, further compromising their future. Plan sponsors can help address these challenges by offering solutions that balance risk and growth, such as target-date funds. Educating participants about health care planning tools like Health Savings Accounts, when available, can also bolster retirement preparedness.

Meeting Generation X Where They Are

Helping Gen X participants achieve retirement readiness requires a proactive and empathetic approach. By addressing their financial challenges, offering tailored resources and promoting education around long-term planning, plan sponsors can help guide this group toward a more secure future.

Sources

https://www.benefitnews.com/news/half-of-gen-x-has-no-retirement-planning-schroders-says

https://corporate.vanguard.com/content/dam/corp/research/pdf/how_america_saves_report_2024.pdf

https://www.pewresearch.org/short-reads/2022/04/08/more-than-half-of-americans-in-their-40s-are-sandwiched-between-an-aging-parent-and-their-own-children/

https://clearingcustody.fidelity.com/app/proxy/content?literatureURL=%2F9910832.PDF

The Part-time Participant

The SECURE Act and SECURE 2.0 have increased many part-time employees’ access to employer-sponsored retirement plans. As such, understanding the unique challenges of improving part-time participants’ retirement readiness, and how their needs may differ from those of full-time employees, is essential for sponsors.

Common Reasons for Part-time Employment

Part-time employees work fewer hours for a number of reasons. Some of the most common include balancing school or training (17.3%), managing non-childcare-related family or personal obligations (13.7%) or limiting earnings due to retirement or Social Security restrictions (8.3%). These challenges highlight the importance of tailoring retirement plan support to part timers’ unique circumstances.

Women Are More Likely to Be Part-time

Women are disproportionately represented in part-time roles, often due to caregiving responsibilities. Plan sponsors should recognize these dynamics and tailor communication strategies to address the financial planning challenges women in part-time roles may face, such as balancing immediate family needs with long-term savings goals.

Onboarding for Less Experienced Participants

Part-time employees may have limited familiarity with retirement plans, especially if their previous roles didn’t offer such benefits. A robust onboarding process can help them understand the importance of enrolling and the potential impact of starting early. Provide simple, clear resources — like short videos or webinars — to help ensure part-time workers feel informed, supported and motivated to participate in the plan.

Lower Income Levels and Contribution Challenges

Part-time employees often earn less than their full-time counterparts, which can limit their ability to contribute to retirement savings. Employers can help boost participation by matching contributions at lower thresholds and offering resources to calculate potential tax savings from pre-tax contributions. Providing clear, targeted messaging about how even small steps toward saving can make a difference — combined with regular reminders — can also help increase engagement.

Less Access to Other Benefits

Part-time employees without access to health insurance may face higher immediate financial pressures due to out-of-pocket medical expenses, making it harder to prioritize retirement savings. Employers can support them by providing education and resources around budgeting, managing health care costs and establishing an emergency fund to help address short-term financial pressures.

Financial Wellness Accommodations

Part-time employees may face scheduling challenges that make it difficult to attend live financial education sessions. Employers should provide flexible, on-demand resources tailored to their circumstances, such as recorded webinars, interactive online tools and self-paced educational materials. These options allow part-time workers to access financial education at their convenience, even if they can’t attend in-person sessions.

Embrace Part-time Participants Whole Heartedly

Addressing the unique retirement planning needs of part-time employees requires understanding their distinct challenges and fostering a sense of inclusivity alongside their full-time counterparts. By carefully considering onboarding, education, communication efforts and plan design with respect to part-time workers’ needs, sponsors can create a more cohesive workforce and strengthen a culture of inclusivity in the workplace.

Sources

https://institutional.vanguard.com/content/dam/inst/iig-transformation/insights/pdf/2023/how-americans-can-save-more-for-retirement.pdf

Amazon Faces Allegations of Mismanaged Funds

Amazon.com Inc. and the administrative committee overseeing its 401(k) savings plan have been hit with a class-action lawsuit alleging improper management of employee forfeiture funds. The lawsuit, Curtis v. Amazon.com, was filed in the U.S. District Court for the Western District of Washington and claims that Amazon fiduciaries engaged in self-dealing by using forfeited plan assets to reduce the company’s own contributions rather than lowering administrative fees for participants.

According to plaintiff Cory Curtis, who is being represented by Terrell Marshall Law Group PLC, Amazon misappropriated millions of dollars in forfeited 401(k) assets between 2018 and 2023. The complaint argues that instead of using the funds to offset administrative expenses—such as recordkeeping fees, investment management fees, and transaction fees—or redistributing them

to eligible participants, Amazon applied them toward its future employer contributions, effectively saving the company millions.

Amazon’s 401(k) plan is among the largest in the country, with over $17 billion in assets and more than 1.3 million participants, according to its 2022 Form 5500 filing. The plan was previously administered by Vanguard Fiduciary Trust Co. until January 7, 2020, when it transitioned to Fidelity Investments, which remains the recordkeeper as of the end of 2023. In 2023, the plan also incurred administrative expenses by paying Strategic Advisors—an affiliate of Fidelity—direct compensation for plan-related services.

The lawsuit claims that Amazon's plan agreement permits fiduciaries to utilize forfeited funds in one of three ways: to restore forfeited accounts, to pay administrative costs, or to lower future matching payments. However, rather than reducing participant fees, the complaint argues that Amazon largely utilized the money to offset its own contributions.

The use of 401(k) forfeitures is the subject of a larger wave of litigation, including this case. Since 2023, over 30 similar lawsuits have been brought against large companies, including Qualcomm Inc., HP Inc., and Honeywell International Inc. Courts have ruled in favor of plan sponsors, such as BAE Systems Inc., Thermo Fisher Scientific Inc., and Clorox Co., dismissing many of these lawsuits.

Legal and industry experts have expressed skepticism about the lawsuit’s merits. Daniel Aronowitz, president of fiduciary insurance firm Encore Fiduciary, argues that these cases are attempts to exploit ERISA regulations. He points out that Amazon’s plan offers some of the lowest fees in the country, recordkeeping fees are only $21 per participant, and Vanguard target-date funds cost between three and four basis points, significantly lower than industry averages. “This is just plaintiff law firms trying to weaponize ERISA, and that’s what’s happening in the modern era with the surge of cases in the second half of 2024,” Aronowitz says. “We find [it] really offensive for Amazon plan fiduciaries to be accused of somehow harming participants. They’ve done everything to ensure the lowest possible fees for their participants.”

In 2023, the IRS reiterated that 401(k) forfeitures may be utilized for participant allocations, plan costs, or employer contributions. In spite of this, the lawsuit demands that Amazon disgorge all profits it allegedly made from managing forfeited cash, fire fiduciaries who are believed to have violated their obligations, and take additional corrective action.

Amazon spokesperson Montana MacLachlan responded to the lawsuit, stating, “While we’re still reviewing the details of this case, we believe these allegations lack merit. We look forward to proving that through the legal process.”

The growing number of forfeiture-related lawsuits has raised concerns about regulatory oversight. Aronowitz criticized the Department of Labor (DOL) for allowing what he calls “regulation by litigation,” arguing that the agency should step in to clarify its position. “The Department of Labor and the IRS have regulations that have blessed this practice [of allocating forfeitures to employer contributions] for years and years,” he says. “What needs to happen is they need to consolidate these cases before one judge and get one ruling.”

As the legal battle unfolds, the case against Amazon could set a precedent for how courts interpret the use of forfeited funds in large retirement plans. If the lawsuit proceeds, it may influence fiduciary practices across the industry and prompt further regulatory scrutiny.

Sources:

https://www.plansponsor.com/amazon-accused-of-mismanaging-millions-of-401k-forfeiture-funds/

Participant Corner

As tax laws evolve and personal financial situations change, it's essential to stay informed about strategies that can help minimize your tax burden. Here are several tips to consider:

1. Maximize Retirement Contributions

Contributing to retirement accounts like 401(k)s and IRAs can reduce your taxable income. For 2025, the IRS has increased the 401(k) contribution limit to $23,500, while the IRA contribution limit remains at $7,000. If you're 50 or older, you may be eligible for additional catch-up contributions. These contributions not only bolster your retirement savings but also offer immediate tax benefits.

2. Consider a Roth IRA Conversion

Converting a traditional IRA to a Roth IRA involves paying taxes on the converted amount now, but it allows for tax-free withdrawals in retirement.* This strategy can be advantageous if you anticipate being in a higher tax bracket in the future or if your current IRA investments have decreased in value, potentially reducing the tax impact of the conversion.

3. Harvest Investment Losses

To balance capital gains from other investments, think about selling any investments that have lost value. Tax-loss harvesting is a method that can lower your taxable income. The "wash-sale" rule, which forbids buying the same or a nearly identical security again within 30 days of the sale, should be kept in mind.

4. Leverage Health Savings Accounts (HSAs)

If you're enrolled in a high-deductible health plan, contributing to an HSA can provide triple tax benefits: contributions are tax-deductible, growth is tax-free, and withdrawals for qualified medical expenses are tax-free. For 2025, the contribution limits are $3,200 for individuals and $6,450 for families, with an additional $1,000 catch-up contribution allowed for those aged 55 and older.

5. Optimize Charitable Giving

You can avoid capital gains taxes by donating appreciated assets, like stocks, directly to charitable organizations, or you can create a donor-advised fund, which enables you to make a charitable contribution, receive an immediate tax deduction, and then distribute funds to charities over time.

6. Plan for Gift and Estate Tax Changes

After December 31, 2025, the existing exemptions from the federal gift and estate taxes will be reduced. Consider tactics like giving assets to heirs now to lower the taxable value of your estate if it above these limits. To learn more about possibilities like trusts or other estate planning tools, speak with a tax advisor.

7. Stay Informed on Tax Law Changes

Tax laws are subject to change, and staying informed can help you take advantage of new opportunities or adjust your strategies accordingly. Regularly consult with a tax professional to ensure your tax planning strategies remain effective and compliant with current laws.

Implementing these strategies can help you manage your tax liability more effectively. Always consult with a qualified tax advisor to tailor these tips to your specific financial situation.

*Withdrawals from Roth IRAs are tax free if taken after age 59½ and at least five years after the conversion.

This content is for informational purposes only and not tax, legal, or financial advice. Please consult a professional for guidance on your specific situation.

Sources:
https://www.ml.com/articles/tax-tips-that-could-save-you-money.html

https://turbotax.intuit.com/tax-tips/tax-pro/6-tax-saving-strategies-and-tips-from-turbotax-experts/L7x25ralu

The Part-time Participant

Mon, 17 Feb 2025 13:44:44 GMT

Common Reasons for Part-time Employment

Women Are More Likely to Be Part-time

Onboarding for Less Experienced Participants

Lower Income Levels and Contribution Challenges

Less Access to Other Benefits

Financial Wellness Accommodations

Embrace Part-time Participants Whole Heartedly

Sources

Why Workers Leave Matching Dollars on the Table

Mon, 10 Feb 2025 13:44:43 GMT

A 2023 Vanguard study found that a quarter of participants deferred less than 4% of their income — generally below the threshold to maximize an employer match. While financial constraints play a role for some, psychological factors can also contribute. Understanding these cognitive biases can help explain why workers forfeit free money — and highlight strategies to help.

Present bias and hyperbolic discounting. People often prioritize immediate rewards over long-term benefits, driven by two related but distinct tendencies: present bias and hyperbolic discounting. Present bias causes employees to favor immediate gratification over future rewards, including employer matches. Hyperbolic discounting expands on this by showing how people increasingly undervalue rewards as the delay to receiving them grows longer. To help address present bias and hyperbolic discounting, employers can frame matches as “an instant 100% return” on contributions. Tools that reduce the psychological distance of future rewards — like visualizing one’s future self — can also help participants better connect with the long-term value of saving.

Anchoring bias and the status quo. Anchoring occurs when employees rely too heavily on initial information — like default rates — while the status quo bias can result in a preference for maintaining the current state, even if better options are available. Defaults can serve as psychological anchors, leading participants to assume these rates are sufficient — even if they fall short of the amount needed to max out their match. Employers can address this by raising default rates and adding auto-escalation features to increase savings over time.

Paradox of choice. When employees are faced with too many options — such as fund selections or allocation possibilities — they may feel overwhelmed and avoid making decisions altogether. Streamlining investment menu options, and offering simplified, automated paths to maximize matches, can help minimize the role of choice in the equation. You can also provide education around target date funds, framing them as a simpler, “one-decision” strategy.

Loss aversion. This behavioral tendency leads people to feel the pain of losses more strongly than the pleasure of equivalent gains. For workers, the psychological weight of “losing” immediate paycheck money can outweigh the future benefits of the “free” match. Plan sponsors can counteract this by flipping the script and reframing the real loss as a missed financial opportunity — that is, what participants stand to lose in terms of the company match. Providing employees a personalized projection of missed matching dollars at their current deferral rate may stoke some healthy financial FOMO, and make the perceived cost of inaction more concrete and immediate.

Social proof and normative behavior. Employees are influenced by their perception of the financial habits of their peers. If maximizing the employer match isn’t seen as the norm, participation can suffer. Promoting retirement saving through success stories can help establish higher contributions as the standard more workers strive toward.

Preventing Retirement Gaps Is Easier Than Closing Them

When employees fail to max out their match, it’s not just today’s dollars they lose. But with proactive steps, you can potentially preserve years of compounded growth and help prevent a retirement gap before it happens.

Sources

https://institutional.vanguard.com/content/dam/inst/iig-transformation/insights/pdf/2023/how-americans-can-save-more-for-retirement.pdf

Financial Wellness Gone Wrong

Thu, 06 Feb 2025 18:57:34 GMT

According to Forbes, a financial wellness program is the new “must-have” employee benefit. And it’s not hard to argue that it’s a must-have for plan sponsors too. After all, financial stress can hinder productivity and dampen employee morale, while financial wellness can help workers gain control of their financial lives and retire on time, saving companies money. But this is one area where less is definitely not more — and rubber stamp solutions can cause problems all their own. Here are four examples of financial wellness gone wrong.

1. One-size-fits-all approaches. Imagine going to a doctor who prescribed every patient the same medicine regardless of their symptoms or diagnosis. Cookie-cutter financial wellness programs make just about as much sense. And worse, unlike employees with no program at all, participants of poorly designed and implemented programs could end up overestimating their preparedness when important areas of financial wellness are neglected. Workers’ financial needs and concerns can vary depending on many factors including age, gender, risk tolerance, life stage, educational level and socioeconomic status. And a sound financial wellness program must address these individual differences.

2. Online-only (non)solutions. Programs without in-person advisory support can leave some employees behind. Digital resources are necessary — but not sufficient — for a robust financial wellness offering. Without the option of face-to-face interaction, those not inclined or well-equipped to take advantage of online resources can be underserved. You want flexible options for both individual and group in-person interactions to enable more in-depth discussion of questions and concerns. Some employees need one-on-one assistance, and increasingly many are expressing the desire to avoid having to tackle retirement planning decisions alone.

3. Limited scope and focus. It can be easy for 401(k) service providers to emphasize programming around retirement plan contributions at the expense of a more integrative financial wellness approach, but they’d do so at the peril of participants and sponsors alike. When workers can’t get a handle on debt, for example, it can be difficult for them to contribute enough to their 401(k) to retire on time. And if they haven’t been educated about the necessity of an emergency fund, it’s more likely they’ll raid their retirement plan in the event of a crisis. The impact of delayed retirement on workforce costs, are well-documented, and SHRM reports that workers under high stress are more likely to take sick days and miss work. Financial wellness programming that fails to cover all the bases — from budgeting to credit and debt to investing and long-term care planning — can leave participants and organizations vulnerable.

4. Insufficient performance metrics. If you don’t gauge progress, how can you (or your participants) tell if you’re making any? The WellCents assessment tool provides a global financial wellness score as well as metrics across a wide spectrum of individual financial priorities. Repeat measures assess ongoing progress while offering participants specific and actionable advice to address their identified needs. And sponsors need their own metrics to evaluate progress: Compared to the average 1-2% utilization rate, WellCents boasts a 35%-75% utilization rate from employees.

WellCents is an integrative and customized end-to-end financial wellness solution that provides benchmarks for progress and actionable advice across a variety of platforms that’s highly individualized to participants’ needs. Sponsors simply can’t afford to get financial wellness wrong. WellCents is the win-win solution you want — and your employees need

Sources

When It Comes to Planning for Retirement, Participants Want to Hit the Easy Button

Fri, 31 Jan 2025 19:03:12 GMT

According to J.P. Morgan’s 2021 Defined Contribution Plan Participant Survey findings, more than half of the 1,281 respondents indicate that they:

Are presented with more plan information than they can absorb.
Don’t read investment information provided to them.
Are willing to spend time planning for retirement but just don’t know where to start.

Nearly three-fourths of participants under 30 think employers should provide access to financial professionals and coaching to help them. Even more telling, 62% wish they could push an “easy button” and completely turn over retirement planning to someone else. This figure is up from 55% in 2016.

What’s fueling these worrisome trends? Perhaps the added complexity of living during a global pandemic has left workers less time and energy to focus on managing retirement planning. Moreover, 24/7 financial reporting on every market twist and turn may make navigating financial landscapes even more daunting. With seemingly endless media coverage of bitcoin surges and day trader-generated run-ups on stocks like GameStop — more may have come to believe that investment decisions are simply best left to professionals.

Financial wellness is arguably a “must-have” benefit for plan sponsors and participants alike. And WellCents™ (a financial wellness solution designed to educate and assist individuals with a myriad of financial issues and goals including but not limited to retirement savings, debt solutions, emergency funds, etc.) provides multiple access points for investing information and guidance. But sponsors can give employees an additional tool for the assistance they're looking for — target date funds (TDFs), which can alleviate workers from many burdens of investment-making decisions.

Nonetheless, easing that burden can come at the expense of a certain degree of customizability. After all, just because two employees have the same planned retirement date, it does not guarantee they'll have similar risk tolerance.

A solution to this problem is adding a TDF with a multiple glidepath construction to your investment menu: one that offers aggressive, moderate and conservative options. This allows participants to enjoy the simplification of retirement plan decision-making while maintaining more control over their level of investment risk — all within a single TDF.

A TDF with multiple glidepaths solves the “once-size-fits-all” limitations of traditional TDFs. Participants simply select the closest year in which they expect to retire and then choose the glidepath that most closely aligns with their personal risk tolerance — as well as the amount of risk needed to accomplish their retirement goals.

Sources

https://am.jpmorgan.com/content/dam/jpm-am-aem/global/en/insights/retirement-insights/RI-PPSF-21.pdf