Review of the year of the 2021 pension plan


Pandemics, political and political changes, volatile investment markets — another year under the belt. WealthManagement.com asked several pension industry leaders for their thoughts on the most important developments of the past year for plan advisors.

Wealth Management: What do you think are the main developments that have affected the work of pension consultants with plan sponsors in 2021?

Byron Beebe

Global Sales Director

Aon Wealth Management Solutions

2021 was the first year for group employer plans (PEP). This has had a significant impact on the market, as plan sponsors now have the ability to partner with other employers and manage more effective retirement programs for their plan members. Some advisors have chosen to create PIPs for their clients and others have chosen to help employers fulfill their fiduciary duty of selecting the best programs for their plan members.

Similar to 2020, the global pandemic has also had a significant impact, of course. Advisors had to meet with plan sponsors and participants virtually rather than in person. Many other educational tools for participants are now available online via videos on demand, which are used much more frequently than in-person meetings.

Anthony bunnell

Retirement manager

Morgan Stanley at work

At the end of 2020, the effects of the pandemic were only partially known. This year, the impact of COVID-19 has hit businesses hard. In the face of supply chain issues, inflation or the Great Resignation, companies with retirement plans face tough decisions. This means that advisors will be invited to suggest plan design changes, potential divestitures and possibly plan termination. On the flip side, regulators are pushing for retirement coverage, so companies without a plan offer are looking for advisers who can provide advice to find the best providers.

For companies considering keeping their retirement program in place, adapting to a virtual communications and education platform has been relatively seamless given the technology of webinars and conferences. Advisors and consultants should make this part of their business model. Over time, it will be interesting to see if virtual educational meetings completely replace face-to-face meetings as travel costs increase; many employees are tired of Zoom and wish to communicate through means other than the webinar.

Rick fuerman

Defined Contribution Marketing Manager

Hartford Fund

In 2020, pension consultants mainly focused on navigating plan sponsors through the implications of the SECURE Act and the CARES Act. They also responded to participants’ pre-retirement concerns by guiding them through market volatility.

With no major new retirement legislation in 2021, pension consultants have focused on the fiduciary responsibilities of the plan sponsor. Perhaps the plan sponsor needed advice on reinstating a matching contribution that they suspended in 2020, or the record keeper of their plan could have been acquired by another and the plan sponsor. wanted to know how this would affect his diet. From the volatility of the markets during an unprecedented period to the day-to-day workings of properly managing a pension plan, these challenges underscore the growing importance of plan sponsors working with a professional pensioner. retirement.

Michelle richter

Executive Director of the Institutional Retirement Income Council

Director of Trust Insurance Services, LLC

2021 has been a volatile year for the world as we all adapt to changing expectations about what constitutes our ‘new normal’ as COVID-19 has become an endemic concern rather than a pandemic. For planning consultants, becoming adept at providing valuable advice through remote and quickly digestible formats has become essential to survival.

In addition to the impacts of COVID on the activities of consultants, another recurring theme in 2021 is the attention paid to the retirement level of the DC scheme experience. Increasingly, plan sponsors are interested in retaining plan members until retirement, not just until retirement. Plan consultants report that almost all of the 2021 tenders asked about their abilities to manage plan retirement income. Plan consultants should be familiar with the growing new generation of secured and unsecured solutions designed to generate income from plan assets rather than on a rollover basis. Many questions are raised by Consultants about which revenue solutions it makes sense to recommend as a QDIA as opposed to those available in a plan menu, as sponsors consider how best to help employees manage the transformation. their account balances in reliable income streams; these issues stem in part from anticipating questions coming from members for good once the SECURE provisions requiring conversions of balance to income on member statements are tested in 2022.

Finally, plan design elements that encourage additional savings and prevent leakage are a priority for sponsors this year, especially in light of proposed legislative changes designed to encourage these improvements to DC plan defaults. Automatic enrollment, automatic escalation, emergency savings options, student loan matches, and products / services adaptable to participants’ unique attributes (including managed accounts) are increasingly in the market. spirit of consultants and sponsors.

Dave stinnett

Director, Retirement Strategy Consulting

Avant-garde

Plan design has come a long way, and plan sponsors are continually looking for ways to achieve positive results for their clients. The passage of the CARES Act and the activities that followed showed us that the majority of participants remained determined on their retirement journey, thanks to a solid design of the plan, but that a small part of the workers had access to their retirement savings. As such, the pandemic has identified a need for plan sponsors and consultants to pursue comprehensive financial wellness strategies to support the financial journeys of their members.

Experience tells us that as the retirement industry continues to evolve, plans will increasingly be designed to produce positive results both financial and emotional. The focus is on providing a holistic financial wellness platform comprising personalized advice and guidance; reliable and quality investments; and a human-centered experience.

Going forward, in addition to financial well-being, plan sponsors and consultants should continue to closely monitor the progress of key retirement policy efforts, including SECURE 2.0, which can improve investor outcomes. .