We continue with the second part of our countdown of the most clicked stories of the past year. The first part is here.
There were some surprises and some entirely predictable, but a look back reinforced just how much happened in the retirement plan space and how far we came in the drive to secure an affordable quality of life in retirement for all Americans.
We begin with No. 5.
No. 5: Bipartisan Gig Worker Portable Benefit Pilot Program Reintroduced
Quite frankly, this was a surprise, but the bill’s bipartisan nature reinforced the largely bipartisan nature of retirement issues overall (ESG notwithstanding).
With more than a third of the U.S. workforce currently engaged in temporary, contract, or on-demand work, a group of senators reintroduced legislation in May to test “innovative portable benefit designs” and help level the playing field for workers without access to benefits.
Sens. Kevin Cramer (R-ND), Mark Warner (D-VA), and Todd Young (R-IN) reintroduced the Portable Benefits for Independent Workers Pilot Program Act (S. 1696), which would provide gig workers with access to certain retirement plans and health insurance protections typically offered to full-time employees.
The legislation would also establish a portable benefits pilot program at the Department of Labor (DOL).
No. 4: Retirement Savers, Investors Believe AI Will Change Everything
Well, OF COURSE artificial intelligence (AI) would show up somewhere on the list, and it happens to be the No. 4 spot.
Morgan Stanley Wealth Management’s quarterly individual investor pulse survey got readers’ attention. The results revealed insights into how investors viewed AI and possible investing use cases:
Most believe AI will be revolutionary for financial services. The majority (72%) of investors believe that AI is a game changer for investors and traders, and nearly three out of four (74%) believe the technology will help Financial Advisors (FA) better serve their clients.
But AI will not take the place of human guidance. Over four out of five investors (82%) believe that artificial intelligence will never replace human guidance. And nearly nine out of ten (88%) agree that the human-to-human FA relationship is extremely important.
No. 3: 2024 Social Security COLA Estimate Falls Sharply on Inflation News
As we said in part one, Social Security COLA estimates always get attention, and not one but two made the list, coming in at 3% and 2.7%, respectively. So, how did The Senior Citizens League (TSCL) do with its estimates? They were a little, and the official announcement of a 3.2% increase was made in October. As inflation eased, so did COLA estimates, just a little more than the actual number.
No. 2: Schlichter Exclusive: Does a New Wave of Fiduciary Litigation Loom?
We’re certainly not surprised that fiduciary litigation made the list, but this one had a twist. Tort terror Jerry Schlichter and his firm, Schlichter Bogard, posted advertisements in May and June looking for employees and potential plaintiffs at Target, State Farm, Nordstrom, and Pet Smart. They sought “current employees who have participated in the company’s healthcare plan.”
The litigation’s basis is found in the provisions of the innocuously labeled Consolidated Appropriations Act of 2021 (CAA)—provisions said by some to be “the most significant compliance challenge employers have faced since the Affordable Care Act.”
The law requires, among other things, a determination of the “reasonableness” of vendor fees and services for healthcare, as well as prescription drug reporting for plan years 2020, 2021, and 2022 (due Jan. 21, 2023).
“The fiduciary duty for a healthcare plan sponsor is essentially the same duty as a retirement plan sponsor of a 401(k) or 403(b),” Schlichter told us. “That duty is to work for the sole benefit of the employees and to make sure fees are reasonable. And that applies to healthcare as well.”
Schlichter noted that this legal exposure for employer-sponsored healthcare plans has always existed, though the CAA now makes it concrete.
“It didn’t create a new duty; it simply defined that duty in a specific way,” he added.
No. 1: New Roth 401(k) Rollover Legislation Introduced
We weren’t surprised that our reporting of a bill that would allow retirement savers to roll their Roth IRA savings into a Roth workplace plan did well. But we were VERY surprised at just how well—posting ridiculous pageviews that significantly spiked our reader numbers for the month.
It led to well over a 100% increase in year-over-year performance for December.
Fearing a bot attack or some spammy reason for the activity, Brandon Avent, our digital production assistant, checked (and rechecked) the numbers, and found them legit.
The bipartisan bill, introduced in mid-December and supported by the American Retirement Association (ARA), noted that workers are currently prohibited from rolling their Roth IRA savings into workplace-based Roth retirement plans, something it would address.
“We applaud Reps. LaHood and Sanchez for introducing this sensible proposal,” ARA CEO Brian Graff said at the time. “Allowing workers to move their Roth IRA balances into designated Roth accounts in a workplace retirement plan would benefit workers in several ways, including the reduction of duplicative fees inherent in maintaining multiple accounts and reduced retirement savings leakage by allowing the seamless transfer of Roth savings through the auto-portability process. These changes will be even more important as state auto-IRA programs grow.”
