What's on the horizon for retirement plans?
Q&A with Scott Mulvaney, vice president and retirement plan consultant at Girard Advisory Services LLC.
Major federal legislation, a rise in ESG investment options and increased cybersecurity are all making marked impacts on retirement plans, says Scott Mulvaney, vice president and retirement plan consultant at Girard Advisory Services LLC, a Univest Wealth Division.
Mulvaney, who is based in Girard’s Souderton, Pennsylvania office, manages retirement plans for more than 100 companies in multiple industries. He also oversees the business development process for Girard’s retirement plan teams.
We sat down with Mulvaney to get his take on what’s been happening lately in the retirement industry and what’s on the horizon, as well as how plan sponsors can best connect with retirement plan participants.
Katie Kuehner-Hebert: What are the latest trends in the retirement plan space?
Scott Mulvaney: We’re continuing to see major legislative changes affecting the retirement marketplace. We saw the SECURE Act introduced in 2019 and officially enacted on January 1, 2020, which was designed to make retirement savings more accessible and improve retirement security. It also provided further incentives for employers to launch new 401(k) plans through additional tax credits that are available to offset some of the startup costs.
The CARES Act was introduced and signed into law in March of 2020, aimed at providing fast and direct economic assistance for American workers and families and small businesses, including easier access to retirement plan withdrawals and loans.
Recently, the SECURE ACT 2.0 was approved by the House Ways and Means Committee in May of this year, which is an expansion of the changes enacted earlier by the first SECURE Act of 2019.
Another trend we’re seeing: ESG — environmental, social and governance — investment options are increasingly being offered within retirement plan investment lineups, driven by investor demand. We’re seeing these investment options available not only in larger 401(k) plans, but also in the small and mid-market space. This trend should continue to see strong growth.
We’re also continuing to see increased measures around cybersecurity with nearly a third of recordkeepers planning to increase cybersecurity staff.
What is your advice on how plan sponsors can best connect with employees?
Employers should recognize the importance of reducing financial stress in the workplace, which has increased in recent years and has a direct impact on employee productivity.
They should be communicating that they care about their employees financial futures and introduce the retirement plan as an integrated part of an overall employee benefits offering.
They should also leverage their retirement plan advisor partner to provide education and guidance to their employees onsite in groups and one-on-one settings, as well as virtually.
I would encourage plan sponsors to work with specialist plan advisors who focus exclusively on qualified retirement plans, and who by and large offer more resources and expertise to better help participants.
How can plan sponsors improve the enrollment process for employees?
Having the plan advisor participate in the benefits open enrollment meetings alongside the benefits broker can be effective, allowing employees to meet face-to-face to answer questions and offer guidance.
There’s no open enrollment period for retirement plans, but there are plan design options such as auto-enrollment that can get employees participating in their plans early and put them on track for a successful retirement.
READ MORE: