Retirement Regulation

Plan sponsors should take note of how rules around retirement plans are evolving due to regulatory changes, including the passage of SECURE 2.0, and whether their strategy remains relevant in this new environment.

SECURE 2.0 includes changes to retirement plans that will push up the age investors are required to start withdrawing from their 401(k)s to 73 in 2023 (from last year's 72).

Ahead of the next Federal Reserve meeting on Feb. 1, ongoing inflation leaves economists expecting bigger rate hikes than most Fed officials have projected.

The cause for the funding challenge is that spending for Social Security is set to increase sharply in relation to GDP in the next decade as the large baby-boom generation retires, according to the CBO.

With the recent passage of SECURE Act 2.0 and the IRS' release of substantially higher contribution limits for 401(k)s, small employers are only just beginning their journey to design and offer robust retirement benefits.

While the latest DOL ruling on ESG implementation in retirement plans is an enormous step forward, more guidance is needed. However, there are several approaches and options that are essential for plan sponsors to keep in mind.

Even up to 40% of middle-income workers are at risk of slipping into near-poverty in retirement, according to the Schwartz Center for Economic Policy Analysis, which recommends universal retirement accounts.

This landmark legislation will open up retirement savings to millions more of Americans by expanding auto-enrollment, providing emergency savings, offering student loan/employer match contributions, and more.