PLANADVISER - Summer 2023 - 31

amount of abandoned 401(k)
s, by having, at least once in
awhile, someone getting a
form in the mail.
Another that I'm excited
about, as part of a financial
planning team, has
nothing to do with qualified
plans, but the fact that
[the government] will now
permit leftover 529 assets to
be moved into that individual's Roth really will knock down
that barrier, because a typical barrier for a parent who's
wondering, " What if I don't need [all the money in it for
their college]? " That will help, because it'll be a wonderful
gift that they can take their leftover dollars there.
I have to admit, one of my disappointments is that I love
this concept of a sidecar emergency savings account, because
I think that's going to help participants put 2% there, and 10%
into their 401(k)-the average participant will do that pretty
painlessly. I'm kind of bummed that that $2,500 cap is in
place because it's not going to feel like very much. It's a great
start, but it would be nice if they could raise that.
Epstein: I have two things I'm excited about, which are also
small but I feel like, for some clients, will move the needle
or just make them happy. ... One is that you have to send
one paper statement a year, which I think is fair and good.
But the other that I was very happy to see is that unenrolled
participants don't need to get one. Because we're
sending so many required notices to everyone who has a
plan account and everyone who's eligible, and it's just a lot
of paper we know they're not reading. ... It's just a waste of
paper or email, so I like that.
The other one was that you can have small incentives
for plan participation and plan enrollment. Because with
plans that don't have auto[matic]-enrollment, we do get
that question a lot: " Can we give them the Starbucks gift
card? " ... If you can give them something, the $25 or $10
Starbucks or Amazon gift card just might really move the
needle on getting those folks to enroll. I was happy to see
that, because there was just a regulatory block on doing
anything like that, and people always ask about it.
PA: Let's wrap, then, on some things you'd like to see that
aren't on the table with SECURE 2.0 and, if we dare ask,
what a SECURE 3.0 should have?
McPherson: I'd still love some greater expansion to the
auto-enrollment for existing plans, because I know they
implemented some of these provisions that have affected
new plans with automatic features. ... There's always the
option for a participant to opt out. But, if every three years,
" The other one was that you can have
small incentives for plan participation
and plan enrollment. Because with
plans that don't have auto[matic]enrollment,
we do get that question
a lot: 'Can we give them the Starbucks
gift card?' " EPSTEIN
we automatically reenrolled people unless they opted out, I
think that would go a long way, in case you forget [to do it].
Send: I'd like to see the kind of clearinghouse concept for
recordkeepers to talk to each other to make the distribution
process easier. We don't make it easy, as an industry,
to allow folks to transfer money from place to place, and I
think that also ties in to that abandoned account thing. ...
If you're a 401(k) recordkeeper, the number [of peers] is not
infinite anymore, right? There are maybe around 30. If they
could all somehow talk to each other to make that transfer
process easy, that would be a win.
The other thing is a completely new issue, and I don't
even know if it can be mandated, but it could really improve
how folks work with their retirement plans. Right now,
especially with the market being lousy, if someone chooses
to retain her savings in the corporate retirement plan-
which oftentimes is much less expensive than hiring your
own wealth manager-if she wants to take money out of
the plan, it has to be pro rata across the funds she owns.
You can't do fund-specific withdrawals. Now some do, but
it's a manual process that, again, sits on the shoulders of
the HR team, and that's just not good.
If Kelli were " queen for the day " and could make any
changes, it would be to say, " You must allow fund-specific
withdrawals from retirement plans. " ... It could really
reduce the leakage from these recordkeepers and from the
actual retirement plan to allow fund-specific withdrawals.
Epstein: One other big thing with SECURE 2.0 that we haven't
talked about is that we have all these new reasons that
you can get service withdrawals. There's really a tension
there between all this push for more participation, like the
long-term/part-time employees and small businesses and
encouraging more plans and more people into plans. But
then you can take it out for all these different reasons. ... I
just feel like we're giving participants kind of a dual message
of, " Put that money away; do not take it until you're retired, "
and, " Oh, by the way, you can get it at any time because you
can self-certify hardship. " ... All of a sudden, it looks more
like a savings account, so your retirement savings is more
like an ATM card, and that's just confusing.
Awards & Innovation | Summer 2023 | planadviser.com 31
http://www.planadviser.com
PLANADVISER - Summer 2023

Table of Contents for the Digital Edition of PLANADVISER - Summer 2023
