2024 Trends in Retirement Plans

As we step into 2024, the world of retirement planning continues to evolve. It’s a great time to look ahead and understand what will guide us in improving retirement outcomes for our clients and their participants. This year, we expect to see a mix of familiar trends from the Secure Act 2.0 and new focuses on personalization and financial wellness. Also, we’re keeping an eye on how the economy will influence our strategies, especially with the upcoming election and the Federal Reserve’s actions against inflation. Here are the major themes we are working on this year:

1. Secure Act Updates

Changes continue to be implemented with the passage of the Secure Act 2.0. Some changes were delayed such as the Roth Catch-up requirement which will take place after 2025, however, there are some mandatory and optional that we are focusing on.

Long Time Part Time Employees.

Employers will now be required to allow long-time part time employees to defer into their 401k if they have worked at least 500 hours of service in each of three consecutive 12 month periods and have attained age 21. That requirement is reduced to two consecutive 12 month periods for plan years after 2025. Additionally, for plan years after December 31, 2024, 403b’s will be required to adopt these new provisions.

Matching contributions on student loan payments

Starting this year, Retirement Plans may treat certain student loan payments as plan contributions for the purpose of match contributions. This provision may mean that employees who make qualified payments on student loans can receive a match even if they were not able to contribute to their plan.

Emergency savings accounts linked to retirement plans

Starting in 2024 the Secure Act 2.0 allows for plan participants to make pre-tax payments to a linked emergency savings account up to $2500 and withdraw up to $1000 without penalty. Providing access to participants to emergency savings when they need it and still save for retirement could help alleviate the anxiety of saving in a retirement plan for lower income workers.

The Secure Act has many other provisions being implemented in 2024 as well. It is important that you discuss with your Administrator to ensure compliance.

2. Personalization

A key area of improvement in the defined contribution space is the increase in levels of personalization at the participant level. By using key demographic information already known by the plan and information received directly from plan participants, 401k and 403b providers can create personalized saving and investment plans for employees at scale. Our approach to personalization is to utilize a tiered approach depending on the level of engagement from plan participants.

Plan-level personalized reporting and engagement

Often times participants are disengaged or recordkeepers don’t have the necessary technological solutions for detailed personalized planning. When that happens, we are finding innovative ways to use readily available plan demographic data to create personalized reports. This strategy enables us to identify participants who need help, so we can proactively reach out to them.

Increased use of Managed Accounts for engaged participants

When participants are engaged and the recordkeeper has appropriate and cost-effective technology solutions, managed accounts can provide an advanced level of personalization for retirement savers. Managed accounts allow professional third-party management of a participants retirement account based on demographic data and input from engaged participants.

When utilizing managed accounts in a retirement plan it is essential to monitor the program to ensure that participants who are paying extra for the service receive additional value through personalization.

3. Focus on Financial Wellness

Technology improvements and engagement

In 2024, there’s a heightened focus on financial wellness within 401(k) and 403(b) plans. Technological solutions are playing a key role, offering sophisticated tools that provide a comprehensive view of an individual’s financial health, including retirement readiness. More providers are entering the market increasing engagement and reducing costs. These new tools are increasing engagement and helping participants create healthier relationships with their money.

Retirement Income hits the mainstream

There is a growing momentum for in-plan retirement income strategies. Plans are increasingly incorporating features that help participants transition their savings into a stable income stream for retirement, addressing concerns about outliving their resources. This shift underscores the evolving role of 401(k) plans from mere savings vehicles to comprehensive retirement planning tools.

As the retirement income market evolves, platforms and investment managers are creating innovative retirement income products at lower costs to benefit more participants.

4. Economic Disruption

The 401(k) landscape in 2024 is also navigating through economic disruptions. The influence of the Federal Presidential election is sure to be contentious and could potentially mean social and economic disruptions through the 2024 election season. 

Furthermore, the Federal Reserve’s efforts to achieve a ‘soft landing’ amidst economic uncertainty are crucial. The Fed’s monetary policies, aimed at stabilizing inflation while avoiding a recession, play a significant role in shaping the investment landscape. Participants and plan sponsors must stay vigilant, adapting their strategies to these evolving economic conditions to safeguard retirement assets.


The 401(k) and 403(b) landscape in 2024 presents both challenges and opportunities. Staying informed and adaptable is key to navigating this dynamic environment. Whether you’re a plan sponsor or a participant, understanding these trends is vital for making strategic decisions that secure a comfortable retirement.

3 Essential Traits to Look for in Your 401k Plan Advisor

Navigating the labyrinth of corporate retirement plan regulations isn’t for the faint of heart, and that’s precisely where a knowledgeable 401k plan advisor comes into play. As HR managers and corporate executives, entrusting your company’s retirement plan to the right person is a responsibility you can’t afford to take lightly. But how do you distinguish a top-tier advisor from an average one? Look for these three crucial traits: fiduciary responsibility, robust governance, and absolute transparency.

The Importance of Fiduciary Responsibility in Your 401k Plan Advisor

One of the most essential characteristics of a proficient 401k plan advisor is their commitment to fiduciary duty. As a fiduciary, an advisor has the legal and ethical obligation to act in your Plan’s best interests. This critical responsibility goes beyond providing sound financial advice – it means putting the participant’s needs above everything else, even their own personal interests.

The best advisors prioritize their fiduciary duty, continually proving their worth through actions, not just words. Remember, a fiduciary duty isn’t something to be taken lightly – it’s a vital factor that protects your employees’ hard-earned retirement savings from potential mishandling.

Why Robust Governance is Critical for your plan.

Next, strong governance structures are crucial for the efficient management of your company’s 401k plan. Advisors with an effective governance strategy will work closely with you to design a plan that aligns with your organization’s vision and values. A robust governance structure ensures that your retirement plan is managed in a manner that minimizes risks, maintains compliance with regulations, and delivers the desired outcomes for your employees.

An excellent advisor will guide you through the creation and implementation of effective policies and procedures. They’ll also play an active role in educating your staff about the plan, fostering an environment where retirement planning is a shared and understood responsibility.

Transparency: The Foundation of Trust in a 401k Plan Advisor Relationship

Transparency is the cornerstone of any successful advisor-client relationship. A transparent advisor will ensure that you’re never left in the dark about any aspect of your 401k or 403b plan. This includes providing clear information about investment strategies, fee structures, and potential conflicts of interest.

Transparency breeds trust, and trust is essential when dealing with something as critical as your employees’ future. An advisor who places a premium on transparency demonstrates their dedication to avoiding conflicts of interest and nurturing a transparent relationship with your organization.

Taking the Next Steps

Choosing an appropriate 401k plan advisor is a decision that carries far-reaching implications for your company and its employees. That’s why it’s crucial to pick an advisor with fiduciary responsibility, robust governance, and unwavering transparency.

Now that you’re aware of what to look for, the next step is a review of your current plan. Whether you’re on the hunt for a new advisor or just want to ensure your current one is up to par, we’re here to help. Reach out today to schedule a review of your plan with us. Together, we can ensure that your employees’ retirement futures are in the right hands.

Top 401k Trends in 2023

As 2023 continues to unfold, shifts in the 401k landscape are redefining how we plan for retirement. Today, we delve into the top 4 trends that are shaping fiduciary governance for 401k Trends in 2023: Retirement Income Solutions, SECURE Act 2.0 updates, Fallout from the Supreme Court ruling in Hughes v. Northwestern, and the rising importance of data privacy.

1. Retirement Income Solutions:

Guaranteed income solutions are gaining traction as participants seek the comfort of predictable payouts in their golden years. Employers are increasingly integrating these solutions into their 401k plans, leveraging innovative annuity products and bond ladders. The trend recognizes that a secure retirement isn’t just about accumulating wealth; it’s about ensuring that wealth translates into a stable income. However, with the rise of such solutions, plan fiduciaries must consider the added complexity and work to ensure these options are in the best interest of the participants.

2. Secure Act 2.0 Updates:

 The Secure Act 2.0 was signed into law in December 2022 and includes several updates that plan sponsors should be aware of. One of the most significant updates is the increase in the age for required minimum distributions (RMDs) from 72 to 73 starting on January 1, 2023, and then further to 75 starting on January 1, 2033. It is important to note that recordkeepers must make changs to their systems to accommodate these new regulations.

3. Active Funds: Are They Worth the Premium?

Despite the trend towards low-cost passive funds, active funds maintain a substantial presence in 401k plans. These funds, characterized by hands-on management and potentially higher returns, often come with higher fees. As fiduciaries, it’s essential to scrutinize these options thoroughly. Are the potential returns justifying the cost? Regularly benchmarking fund performance and fees is crucial to ensure participants are receiving value for the fees they are paying.  It is also important to note that all investments must be appropriate for the plan’s participants, as determined by the recent Northwestern Supreme Court case. 

4. Data Sharing and Participant Privacy:

As digital transformations permeate the financial sector, participant data privacy is paramount. Increased data sharing between plan administrators, payroll providers, and third-party service providers can enhance the participant experience. But it also necessitates robust safeguards to protect sensitive information. Fiduciaries must ensure data privacy policies are in place and enforced. In 2023, striking a balance between personalized services and data security is a challenge that every plan sponsor needs to meet.

In conclusion, 2023 is proving to be a dynamic year for 401k plans. These 401k trends in 2023 underscore the need for fiduciaries to stay informed and adaptable, continually working to ensure plans meet the evolving needs of their participants while protecting their interests. Staying ahead of these developments is key to providing a retirement plan that is not just compliant, but also helps provide better outcomes for your employees. 

Fiduciary Governance for CFO’s

Fiduciary governance plays a crucial role in ensuring that 401k plans comply with the Employee Retirement Income Security Act (ERISA) regulations. By establishing strong fiduciary governance, CFOs can mitigate the risk of potential liabilities and safeguard the interests of their employees.

ERISA requires that plan fiduciaries, including CFOs, act solely in the best interests of plan participants and beneficiaries. Failure to fulfill this obligation can result in serious consequences, including potential lawsuits, regulatory penalties, and reputational damage. Therefore, it is essential for CFOs to understand how fiduciary governance can help them fulfill their fiduciary duties and avoid potential liability under ERISA.

Fiduciary governance involves establishing and implementing a set of procedures and processes that enable plan fiduciaries to manage their responsibilities effectively. This includes defining the roles and responsibilities of plan fiduciaries, establishing investment policies and procedures, monitoring plan performance, and conducting regular fiduciary training and education. By implementing a robust fiduciary governance framework, CFOs can ensure that they are fulfilling their fiduciary obligations and reducing their liability under ERISA.

  1. Minimizing Conflicts of Interest: A strong fiduciary governance framework includes policies and procedures that help minimize conflicts of interest. This includes establishing clear guidelines for selecting and monitoring plan investments and service providers. By doing so, CFOs can reduce the risk of potential conflicts of interest and ensure that their decisions are made solely in the best interests of plan participants and beneficiaries.
  2. Ensuring Investment Diversification: ERISA requires that plan fiduciaries ensure that plan investments are diversified to minimize the risk of large losses. Fiduciary governance can help ensure that the plan’s investment portfolio is well-diversified and aligned with the plan’s investment objectives. This can help protect plan participants and beneficiaries from undue investment risk, reducing the risk of potential liability for plan fiduciaries.
  3. Conducting Regular Plan Reviews: Fiduciary governance requires that plan fiduciaries conduct regular reviews of plan investments, fees, and service providers. By conducting regular reviews, CFOs can identify and address potential issues before they become major problems, reducing the risk of potential liability for plan fiduciaries.
  4. Documenting Fiduciary Decisions: A robust fiduciary governance framework includes documenting all fiduciary decisions made by plan fiduciaries. This documentation serves as evidence that the plan fiduciaries acted prudently and in the best interests of plan participants and beneficiaries. In the event of a lawsuit or regulatory audit, this documentation can help reduce the risk of potential liability for plan fiduciaries.

In conclusion, fiduciary governance is a key aspect of managing a 401k plan, and it can significantly reduce liability under ERISA for CFOs. As a CFO, it is your responsibility to ensure that your 401k plan is managed with the highest standards of fiduciary governance. By implementing a robust fiduciary governance framework, you can fulfill your fiduciary obligations, protect the interests of plan participants and beneficiaries, and mitigate the risk of potential liability. So, take action today and establish a strong fiduciary governance framework for your 401k plan to safeguard your company’s reputation and protect your employees’ financial futures.

401k Trends for 2022

As we head into the fall and prepare for the 2022 plan year, here is a list of our 4 top retirement plan trends that we are implementing with our clients.

1. Inflation

Over the past several months, we have seen an increase in inflation in many sectors of the economy. While the Federal Reserve has said that the inflation we are experiencing now is temporary, there is no hiding the fact that we are near a 40 year low in interest rates.

Bonds are typically held in a portfolio with the goal to reduce volatility and provide a baseline income level in a proper asset allocation strategy. However, bond prices move in an adverse relationship to their yield. As a result, bond prices go down as yields rise, resulting in potential losses in an investor’s portfolio.

Not all Bonds have the same sensitivity to rising rates

There are many reasons why bond yields may rise, but not all bond prices will react the same to a rise in interest rates. Some bonds, such as inflation-indexed bonds, will increase their coupon rate as inflation rises, reducing pressure on the bond’s price to go down. Traditional bonds typically used in retirement plans tend to be more sensitive to rising rates, such as intermediate corporate bonds.

What you can do to help your participants

We have been adding in additional exposure to our lineups that include less traditional bond funds for some time. Funds such as inflation-protected and multi-sector bond funds may offer your participants flexibility to adapt to rising rates.

2. Taking Control of Plan Data

This year there have been several high-profile data breaches in the news. As more and more of your plan data gets placed online, Plan sponsors need to be aware of their exposure to potential data breach liability through internal systems and vendors.

In February of this year, the Government Accountability Office (GAO) recommended that the DOL formally state whether it is a fiduciary’s responsibility to mitigate cybersecurity risks in DC plans and establish minimum expectations for addressing cybersecurity risks in DC plans.

For its part, the DOL Addressed the second part of the request by releasing three pieces of guidance relating to best practices concerning: Hiring a Service Provider, Cybersecurity, and Online Security tips.

Plan Sponsors in their role as fiduciaries should begin to adopt cybersecurity best practices in anticipation of the DOL guidance that may make a failure to secure participant data a fiduciary breach.

Participant data may be a liability even if it is not "stolen"

We have seen a rising number of court filings and lawsuits alleging that service providers that utilize plan and participant data to sell other products are doing so in breach of fiduciary duty. In most cases, including the high-profile NYU case, the plaintiffs typically claim that recordkeepers were using their access to participant demographic data to sell lucrative financial instruments without compensating the plan for that use. To date, we have not seen any of these allegations be successful. However, not all the lawsuits in question have worked their way through the appeals process.

Plan Sponsors would be wise to take heed and start asking better questions of their service providers and their use of participant data to sell ancillary products to their participants.

3. Personalized Education and Advice

When used correctly by the plan, Participant data can be a valuable tool to identify and communicate with plan participants actions and advice independent of the services available from their recordkeeper.

Plans of all sizes utilize participant data to identify underperforming demographic cohorts to customize advice at scale in their retirement plans. Some of the programs we are seeing plan data participant data include:

  • Financial Wellness Programs
  • Financial Coaching
  • Managed Accounts/Personalized recommendations
  • Plan Health Reports

As discussed earlier, it is vital to have a formal plan whenever sharing participant data and ensuring that the data is used in the best interest of plan participants. However, as software and third-party services become more sophisticated and available, it may make sense to use participant data beyond the off-the-shelf services provided by some recordkeepers.

4. Missing and Low Balance Participants

Missing participants continues to be a topic of emphasis for IRS, DOL, and EBSA regulators. The primary duty of any fiduciary is to provide benefits to plan participants when due. Integral to that responsibility is for plan sponsors to know whom they owe benefits to and how to reach them for communicating vital Plan information.

Before 2014 the IRS had a program that you could use to forward mail to missing participants. However, since that program has terminated, there is no easy solution to finding missing participants. The DOL has issued guidance in January providing best practices for Plan Fiduciaries, including:

  • Maintaining accurate census information for the plan’s participant population
  • Implementing effective communication strategies
  • Missing participant searches
  • Documenting procedures and actions

Examples of participant searches include:

  • Checking related Plan and employer records
  • Checking with designated Plan beneficiaries
  • Using free online searches
  • Using a commercial locator service
  • USPS certified mail features
  • Death and social security searches
  • Reaching out to colleagues who worked with the person in the past.

Use force-out provision to remove low balance participants annually

One way to reduce your burden on locating missing participants is to regularly force out terminated participants with low balances while you are still in contact with them. Most plan documents have a provision that allows them to force out low-balance participants through a systematic process if their balance is below $5,000.

Most recordkeepers can automatically force out low-balance participants regularly through an automatic IRA provider and are more than happy to do that. However, we have found that few plans that come to us are taking advantage of this service. If your provider does offer this service, sign up or consider using one of the third-party providers who can provide that service free of charge.

If your provider doesn’t have a solid process for finding missing participants or forcing out low-balance participants, there are several third-party providers that we have worked with who can do a great job.

Remember to keep good documentation when forcing low-balance participants out of the plan. Often, the participant can easily miss the required notices alerting them to the forced-out distribution. As a result, the participant may be unaware that the plan transferred their account. Your responsibility is to keep a copy of any communications sent in their employee file or other safe location that can easily be referenced years into the future.


If you’d like to talk about any of these trends for your plan, please call us today.


This information is not intended as authoritative guidance or tax or legal advice.  You should consult your attorney or tax advisor for guidance on your specific situation.  In no way does advisor assure that, by using the information, plan sponsor will be in compliance with ERISA regulations. 

Would You Work for Free?

Would You Work for Free?

Recently, I was on a call with a new prospect, a CPA, discussing his 401k plan.  During our call, we got to the subject of the fees he is currently paying for his 401k plan.

After some back and forth, Mr. CPA told me that he was not paying anything for his 401k plan. When I mentioned, that he may not have a direct bill but the fees are lumped in with the investments, which is typical in older plans, he got angry and ended the call saying: “We’ve been down this road before and we pay NOTHING for our 401k plan.”

This call got me flustered, and I was genuinely upset after hanging up, or rather, getting hung up on!

Given how much attention the 401k industry has paid to fees since Fee Disclosure was introduced in 2012, I thought that we had moved past fees.  I thought employers had at least been given enough information to know that they are paying someone something for their 401k plan.

If a CPA could fall for this sales pitch, Houston, we still have a problem.

So, this begs the question, would you work for free?

I think the obvious answer to that is, No! No one would work for free, nor should they. There are a lot of moving parts to a 401k and the thought that a company would take custody of your money, keep track of your individual employee’s accounts, create a website and mail statements for free doesn’t make sense.

The point is, there are at least 3 different entities that are being paid for from your 401k Plan. They are: The Recordkeeper, The Investment Management Company, and The Advisor.  In some arrangements you will also have a Third-Party Administrator who can get paid from the plan.

I can assure you that none of these parties work for free.  If you don’t receive a bill directly from any of these parties, that means that they are receiving fee’s directly from your plan assets.  This is a process called revenue sharing, and it is the way that plans historically paid for their 401k’s.

A Primer on Revenue Sharing

 Today, most plans are paid for by the revenue from funds in an ERISA bucket or Plan Expense Account or by moving to a more transparent process we call “zero-revenue” which strips out the fee payments from the investments and bills either the company or participants directly for plan related services.  Either way, fees that come from plan assets, need to be accounted for.

All fees aren't bad

Fee’s aren’t inherently bad, but high fees are. Sometimes, you do get what you pay for and there are no rules that say you need to pay the lowest fees possible, but as a sponsor of a 401k or 403b plan, it is your fiduciary duty to understand who is receiving fees from your plan and to ensure that those fees are reasonable for the services that they are providing.

All of these fees can be found on your Fee Disclosure statement that you can get from your provider.  I encourage you to take some time to look at those statements and work with someone who can make sense of the fees and whether you are paying a reasonable amount for services. 

If it sounds too good to be true it may be

The phrase “Too good to be true” should come to mind anytime someone says that they are giving you anything for free.  As a rule of thumb, if someone says that your 401k plan is “Free” they probably don’t want you to take a closer look. 

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