PLANADVISER - March/April 2020 - 4

Changing Directions
intro //
AS WE BEGAN planning this issue, aspects of the SECURE [Setting Every
Community Up for Retirement Enhancement] Act were top of mind. Among
the potentially sweeping changes the act has brought to bear is the authorization
of pooled employer plans-or PEPs.
Come next January, PEPs will offer a new way for unrelated employers,
particularly small employers, to collectively participate in a 401(k) plan.
According to the Department of Labor (DOL), about 38 million working Americans
do not have access to an employer-sponsored plan.
Richard Rausser, senior vice president at Pentegra, said, " Everyone we talk
to-financial advisers, 3(38) fiduciaries, 3(16) fiduciaries, recordkeepers, mutual
fund families, investment houses, trustees-everybody is clamoring to participate
in PEPs. They're all thinking they need, and want, to be a part of this. " We
cover various approaches to these plans in " Pooled Strength " (page 14).
" Hazard Prevention " (page 36) focuses on how advisers can help 403(b)
clients stave off lawsuits by improving plan governance policies. These
lawsuits, filed on behalf of participants, claim excessive investment and plan
administration fees, unnecessary expense due to 403(b) plans' multiplerecordkeeper
model, and the confusing number of investment options the
plans frequently offer. But David Levine a principal with Groom Law Group,
Chartered, in Washington, D.C., reminds advisers that 403(b) plans are
different from 401(k) plans and it's important for advisers to recognize this.
Columnist, and attorney, David Kaleda zeros in on the growing trend of suing
small defined contribution (DC) plans in " On Small Plans and Large: Any size
plan could be a target for fee litigation " (page 39).
Our Investment-Oriented department this issue discusses " The Risks of
DC Investing " (page 28). Taking a lead from a J.P. Morgan Asset Management
white paper, the article examines how some risks are " outgoing " and result
from a participant's own lapses. " Incoming " risks represent situations beyond
a participant's control such as the current volatility in stock prices resulting
from COVID-19. Besides rebalancing and diversifying investments when
appropriate, to increase savings overall is key, experts say.
As this issue went into production, we changed direction and began to
report on the steps taken to address the coronavirus impact, and we touch
on it in Trends, starting on page 8. Our website, PLANADVISER.com, updates
daily with analysis of market movement, business challenges and legislative
and regulatory actions related to the pandemic; it's a great resource.
Let us know if we can be of any help to you with your practice or clients
during these times of change. We may be able to help, or we can direct you to
the resource that can. -Judy Faust Hartnett, Managing Editor
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PLANADVISER - March/April 2020

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