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With SECURE 2.0, the Cash Balance DB Plan May Be Back

"Thanks to the return of regulation that allows for plan payouts to align with employee tenure, companies may be interested in starting DB cash balance plans again[.]"

Pass-Through Tax Reform Impact on Small Businesses May Be Mitigated by Roth

"[A] business owner that feels that their pre-retirement tax-bracket is lower than their retirement tax bracket could save significantly more through the 401(k) Roth feature versus a Roth IRA. The Roth feature would allow them for 2018 to contribute $18,500/$24,500, if age 50 by the end of the year, and receive the distribution tax-free assuming current rules. This is significantly more than the $5,500/$6,500, if over age 50, for IRAs for 2018."

Survey Finds Retirement May Be a Thing of the Past

CareerBuilder asked workers how soon they think they can retire from their current job; one in 10 (11%) respondents said they don't think they'll ever be able to retire.

DOL and SEC Uniform Advice Standard May Not Be Far Off

"[T]he SEC has received a small library's worth of fresh investing industry commentary on the multifarious issue of identifying and preventing advisory industry conflicts of interest. Many of the comments mention serious discomfort with the DOL's strengthening and expansion of its fiduciary standard, voicing a whole host of now-familiar concerns that a stricter DOL conflict of interest paradigm may unnecessarily jeopardize well-established compensation practices that have only recently become the object of scrutiny and are not in themselves problematic."

Anti-ESG Bill Would Require Only Pecuniary Factors to Be Considered for ERISA Plan Investments

"The Ensuring Sound Guidance Act would ... require advisers and broker/dealers to only consider pecuniary factors, unless a client consented in writing to the consideration of other factors.... [ERISA] would also be amended to likewise require ERISA fiduciaries to only consider pecuniary factors. The only time a non-pecuniary factor could be considered is 'If a fiduciary is unable to distinguish between or among investment alternatives.' "

Why Chevron Reversal May Make Retirement's 'Most Cautious' Players More Risk-Averse

"Open court filings against the DOL are already raising questions as to whether the decision will play a role ... The courts ... may still side with regulators, but it is also likely that differences will emerge across districts, states and appellate circuit courts, further complicating the picture for plan fiduciaries.... To the extent that plan fiduciaries are concerned about litigation risk, they may be less inclined to adopt an optional standard with a high likelihood of being challenged[.]"

Rollovers May Reach $1.1 Trillion by 2030

"By 2030, U.S. retail retirement plan rollovers are expected to reach $1.15 trillion ... That would represent a 34% increase from the estimated $855 billion in retail rollovers expected in 2025 and nearly double the $612 billion in retail rollovers in 2020.... The average size of rollovers for people aged 50 to 74 more than doubled since 2007, increasing from $101,400 to an estimated $220,00[.] "

FTX Bankruptcy May Chill Crypto Use in Retirement Plans

"The fast fall of FTX, which caused a related drop in mainstay cryptocurrencies such as bitcoin, came to a head [November 11] with Bahamas-based FTX filing for Chapter 11 bankruptcy. No matter the outcome of the proceedings, ... financial and retirement advisers may be chilled on recommending the asset[.]"

Social Security Administration Updates Identity Proofing Requirements, Delays Implementation

"Under the updated policy, now slated to take effect April 14, 2025, individuals applying for Social Security Disability Insurance, Medicare or Supplementary Security Income who cannot use their personal 'my Social Security' account online can complete their claim entirely over the telephone, without the need to come into an office.... Individuals who cannot use their personal online my Social Security account to apply for benefits will only need to provide proof of their identity at a Social Security office if applying for Retirement, Survivors or Auxiliary (spouse or child) benefits. The SSA said it will enforce online digital identity proofing or in-person identity proofing for these cases."

Plan Sponsors Using PBGC Lump-Sum Assumptions May See Changes

"The agency has issued proposed rules on Benefits Payable in Terminated Single-Employer Plans and Allocation of Assets in Single-Employer Plans, as well as the assumptions PBGC uses to determine de minimis lump sum benefits in PBGC-trusteed terminated single-employer [DB] pension plans.... The agency also warns plans sponsors that once the appendix C rates are no longer identical to the rates used by the PBGC, the plan terms may have an ambiguity that should be resolved."