Nearly 90% of financial services executives in the retirement income market think that the DOL fiduciary rule will lead more people to keep their money in DC plans, creating “permanent participants,” according to Lisa Greenwald of Greenwald & Associates.
In her regular column in the most recent issue of NAPA Net the Magazine, Greenwald reveals several conclusions from a recent study her firm conducted that polled nearly 40 executives and included follow-up and roundtable discussions.
“I believe it is incumbent on plan advisors to inform plan sponsors that [the fiduciary rule] may well lead to more ‘permanent participants’ and could affect (probably negatively) access to education and advice for both working and retired participants,” Greenwald writes. “Clearly, plan sponsors have varied views on participants keeping their accumulations in the plan after retirement. But if middle income workers have more trouble getting the advice they need after retirement, it seems to me that plan sponsors should help these workers use the retirement plan more effectively after they have retired,” she believes.
If more money does stay in DC plans, it provides more reasons for the development of a new set of investment options designed for retirees, Greenwald argues, suggesting that “a basket of investment options, some with guaranteed lifetime income and others designed for income without guarantees, should be considered to allow the retirement plan of the future an opportunity to more comprehensively serve these permanent, retired plan participants.” Additionally, she suggests, new tools should be considered to help retirees manage money in the plan and to estimate how much they should prudently withdraw each year.
“If mass market retirees will have a harder time getting advice outside the retirement plan, does that open up new opportunities for you, because of your access to participants — and how can you capitalize on these opportunities?” Greenwald asks.
In addition to Greenwald’s regular column, the fall issue of NAPA Net the Magazine includes our cover story on the impact of the DOL conflict-of-advice rule on DCIOs and record keepers and NAPA’s 2016 Top 100 Wholesalers list. The issue also features insights from regular contributors Jerry Bramlett, Steff Chalk, Nevin Adams, Warren Cormier, Brian Graff, Don Trone, Sam Brandwein, Fred Barstein and David Levine.
To view Greenwald’s column, click here and select “Permanent Plan Participants.” And to view a pdf of the full 64-page issue, click here.
