PLANADVISER - Winter 2023 - 28
Plan Design
Let It Ride
Options and features that can encourage pre-retirees to stay in-plan
AS MORE plan sponsors begin thinking about their plans
as vehicles for accumulation plus decumulation, rather
than simply accumulation, they are also reevaluating their
plan design with an eye toward incentivizing pre-retirees to
remain enrolled once they no longer work.
More than 40% of plan sponsors said they prefer for
retiree assets to remain in the plan, while another third are
actively seeking to retain retiree assets, according to 2023
data from Cerulli. Demographic shifts have made this even
more a priority in recent years, as plans recognize that the
wave of Baby Boomer retirements means they are at risk of
losing many of their largest account balances.
Taxpayers rolled nearly $620 billion into individual
retirement arrangement plans in 2020, the most recent
year for which IRS data is available-more than double the
$300 billion that was rolled over in 2010. That trend could
lead to the loss of institutional pricing and drive up costs
for a plan as a whole.
Courtney Stroope, managing director of retirement
solutions at Creative Planning Retirement Services in
Dallas, says more paternalistic firms also see decumulation
options as the best way to serve their participants and
help them move toward a more financially secure retirement,
a view that her firm endorses.
" We really come from this mindset of 'These participants
were a critical part of your workforce, for years,
if
not decades,' " she says. " So offering them these options and
helping them make good, financial decisions in the next
chapter in their life is a great way to honor all that they've
given the organization. "
It may also help reduce legal liability.
" Plan sponsors have a fiduciary obligation to look at and
understand the needs of the current workforce of employees
but to also understand how it affects terminated employees
with an account balance still in the plan, " Stroope says.
Data Can Make the Case
For plan sponsors that hesitate to encourage retirees to
remain in their plan, Ellen Lander, principal and founder of
Renaissance Benefit Advisors Group, now a Hub International
company, in Pearl River, New York, often shows them data on
their plan that illustrates what percentage of their assets is
with active vs. terminated participants, and what percent of
the participant base is active vs. terminated. For some plans,
the share of terminated assets can be close to 50%.
Then, Lander reminds them that they may not mandate
28 planadviser.com | Winter 2023 | Plan Management
Art by Georgie McAusland
http://www.planadviser.com
PLANADVISER - Winter 2023
Table of Contents for the Digital Edition of PLANADVISER - Winter 2023
Publisher’s Note
Just the Facts
On the Move
Nuts & Bolts
What’s Next?
Best Foot Forward
2023 PLANADVISER National Conference
Cybersecurity Conference
Let It Ride
Cultivating Connections
The Risks of Custom TDFs
Managed Account Services
People-Savvy
Be Sure They Get the Message
End Paper
PLANADVISER - Winter 2023 - Cover1
PLANADVISER - Winter 2023 - FC1
PLANADVISER - Winter 2023 - FC2
PLANADVISER - Winter 2023 - Cover2
PLANADVISER - Winter 2023 - 1
PLANADVISER - Winter 2023 - Publisher’s Note
PLANADVISER - Winter 2023 - 3
PLANADVISER - Winter 2023 - Just the Facts
PLANADVISER - Winter 2023 - 5
PLANADVISER - Winter 2023 - 6
PLANADVISER - Winter 2023 - 7
PLANADVISER - Winter 2023 - On the Move
PLANADVISER - Winter 2023 - 9
PLANADVISER - Winter 2023 - 10
PLANADVISER - Winter 2023 - 11
PLANADVISER - Winter 2023 - Nuts & Bolts
PLANADVISER - Winter 2023 - 13
PLANADVISER - Winter 2023 - What’s Next?
PLANADVISER - Winter 2023 - 15
PLANADVISER - Winter 2023 - 16
PLANADVISER - Winter 2023 - 17
PLANADVISER - Winter 2023 - 18
PLANADVISER - Winter 2023 - Best Foot Forward
PLANADVISER - Winter 2023 - 20
PLANADVISER - Winter 2023 - 21
PLANADVISER - Winter 2023 - 2023 PLANADVISER National Conference
PLANADVISER - Winter 2023 - 23
PLANADVISER - Winter 2023 - 24
PLANADVISER - Winter 2023 - 25
PLANADVISER - Winter 2023 - Cybersecurity Conference
PLANADVISER - Winter 2023 - 27
PLANADVISER - Winter 2023 - Let It Ride
PLANADVISER - Winter 2023 - 29
PLANADVISER - Winter 2023 - 30
PLANADVISER - Winter 2023 - 31
PLANADVISER - Winter 2023 - Cultivating Connections
PLANADVISER - Winter 2023 - 33
PLANADVISER - Winter 2023 - The Risks of Custom TDFs
PLANADVISER - Winter 2023 - 35
PLANADVISER - Winter 2023 - Managed Account Services
PLANADVISER - Winter 2023 - 37
PLANADVISER - Winter 2023 - People-Savvy
PLANADVISER - Winter 2023 - Be Sure They Get the Message
PLANADVISER - Winter 2023 - End Paper
PLANADVISER - Winter 2023 - Cover3
PLANADVISER - Winter 2023 - Cover4
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