PLANADVISER - Winter 2023 - 29

a cash-out for participants who have a plan balance over
$5,000-an amount that will increase to $7,500 starting
in 2024, under a provision in the SECURE [Setting Every
Community Up for Retirement Enhancement] 2.0 Act.
" They can't kick them out anyway, " Lander says. " So
[suggest they] get comfortable with keeping them in-plan.
There are many benefits to [their] having terminated people
in the plan. It's a win-win. "
But even for clients on board with designing a plan that
keeps in-plan retirees in mind, committees generally have
less experience designing a plan that allows for decumulation.
Retirees typically have different goals and more
complex financial needs than those still saving for their
golden years. That creates an opportunity for plan advisers
to help the sponsor determine the plan design changes that
make the most sense for its plan and participants.
Plan advisers can also make sure their clients are working
with a recordkeeper that can deliver the products, investments
and other solutions needed to provide a best-in-class
experience to in-plan retirees, says Taylor Hammons, head
of retirement plans for Kestra Financial in Austin, Texas.
Then, advisers, recordkeepers and plan sponsors can work
together to communicate and promote such features to the
appropriate audience.
" If they're going to do it, they have to do it right, " says
Nathan Voris, head of channel strategy for Morningstar's
retirement and workplace solutions in Richfield, Ohio. " If
you want people to stay in a plan, you have to build out the
features, products and services a retiree needs. It can be
as simple as the sponsor looking at its payout provisions
and making sure its managed account product has a highquality
managed spending component. "
Recognize Diverse Needs
Such conversations between plan advisers and their plan
sponsor clients reflect a recognition that this is the first
time in history that employers potentially have five generations
of workers participating in their retirement plan.
" Plan sponsors need to really think broadly about
the variety of needs and population segments they're
serving, " says Teresa Hassara, senior vice president of
workplace savings and retirement solutions at Principal
Financial Group in Carlisle, Massachusetts. " They have
people working full time, early career workers, part-time
employees, and those exiting and going into retirement.
There's a fundamental shift that plan sponsors need to
make, and an adviser can help them philosophically think
through whether they believe the retirement plan should
cover participants from hire through retire-and then
develop a program with that in mind. "
While retirement-income solutions have received much
attention in recent years, thanks to provisions in the
SECURE Act of 2019 that make it easier for plan sponsors
to incorporate annuities into their plans, that is only one
component of creating a retiree-friendly plan.
" Retirement income is important, but there are many
things plans can do before they even get to that point to
make sure they're ready for retirees, " Voris says. " There
are certainly some product innovations and recordkeeping
platform enhancements that could be made concerning
Plan Management | Winter 2023 | planadviser.com 29
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