PLANADVISER - Summer 2023 - 29

it's wait and see at this point.
Jodi Epstein: That is so interesting,
because I've had
no interest from clients in
having the employer match
or nonelective go in as Roth,
maybe partly because that was
effective immediately. ... Without answers about how the
reporting works, everyone is saying, " I'm not doing that. "
But even if they could do it, I feel like people are thinking,
" We've had lots of questions on
catch-ups, on the Roth mandates,
on the long-term/part-time workers,
and on how onerous many of the
administrative duties related to these
provisions are going to be. " MCPHERSON
" Well, we have in-plan Roth conversions, so you don't need
that. " But then I hear from folks that the recordkeepers
are clunky with the in-plan Roth conversions, so putting
money in as Roth may just be cleaner.
Send: I think we're hearing about it because participants are
interested in it. We've been big Roth fans all along. Every
single one of the plans we consult on is Roth, and there
are some recordkeepers that didn't get heavily into Roth
until recently. Everybody will have to have Roth now, due
to the mandatory catch-up requirement [for people earning
$145,000 or more]. So we know that's going to happen. But I
think there's hesitancy among the plan sponsors, because
these poor HR [human resources] folks are like, " OK, now
it's one more thing I've got to figure out. " So I think there's
a hesitancy in the industry. But I think the participants will
generally be interested, and that's partly because, when you
talk about doing a Roth conversion, you're talking about
having to pay tax on a big chunk of money. It feels less
painful to do it if it's just 10 bucks a paycheck.
Dawn McPherson: We've hardly had anything go into
effect; so much of it is coming next year. But I think that's
exactly what people are feeling right now, which is overwhelmed.
... People are trying to sort through, " What do
I have to do? What am I going to be required to do versus
what's optional? " So there are multiple layers. [Folks are
wondering:] " How do I stay competitive in this current
environment we've been in with the type of employment
market we have and people fighting over good employees?
How do we keep ourselves competitive, and what benefits
should we be offering? " Then, there are the various effective
dates and the staggered timeline. While that's nice
because it gives you a little time, it's also daunting. So how
do you keep track of it?
PA: That's a good segue into the next question, which is:
What are some of the biggest concerns with or questions
about SECURE 2.0?
Epstein: The first is the long-term/part-time employee
provision, which becomes effective in 2024 with the threeyear
look-back, and then SECURE 2.0 makes it a two-year
look-back in 2025. People have to have coverage for longterm/part-time
employees, and we need some guidance on
some of the details of that. ... I'm certainly getting anxious
about it, because people have to make decisions about how
they're going to give those long-term/part-time employees
plan access. Are you just going to have them on a separate
track? You know-at least 500 hours for three consecutive
12-month periods, and, boom, you're in. But you get
no match, no profit-sharing, and we can exclude you from
testing. Which raises the question, is it all separate? ... If
you have them on these two separate tracks, what happens
if the employee goes up to working 1,000 hours? Then, I
think, they're in the regular way, but what if they toggle
Jodi Epstein is an employee benefits partner in
Ivins, Phillips & Barker in Washington, working on
all aspects of employee benefits and focusing on
defined benefit and 401(k) plans. She is an expert
in integrations after acquisitions, setting up new
benefit platforms, pension plan lump-sum windows
and terminations, and advising qualified plan
committees regarding their fiduciary duties.
Dawn McPherson is director of retirement plan
consulting for CAPTRUST Financial Advisors in
Kansas City, Missouri. She is responsible for the
development of consulting services to address the
needs of CAPTRUST's clients and oversees the firm's
Employee Retirement Income Security Act and
non-ERISA technical support teams.
Kelli Send is senior vice president of participant
services and a co-founder of and principal in
Francis LLC in Brookfield, Wisconsin; she leads
the firm's MoneyAdvice@Work team, specializing
in employee education and personal financial
wellness services. She holds a Certified Financial
Planner designation.
Awards & Innovation | Summer 2023 | planadviser.com 29
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