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401(k) Real Talk Transcript for November 15, 2023

Transcript of Episode 84 of 401(k) Real Talk.

Greetings and welcome to this week’s edition of 401k Real Talk. This is Fred Barstein contributing editor at’s RPA Edge and CEO at TRAU, TPSU & 401kTV - I review all of last week’s stories and select the 5 most important and interesting ones providing open honest and candid discussion you will not get anyway else. So let’s get real! 


The DOL’s new Retirement Security Rule continues to be the hot topic of discussion as the industry digests the 500 page regulation. At the recent C(k)P training at UCLA, Fred Reish, who actually read the rule twice, explained that it is expected to become law next summer with applicability at the beginning of 2025 though lawsuits cd extend that until as late as 2028. Notably, a new administration cd not wipe out the rule without going through proper procedures but it cd decide not to defend it in court.

Along with changing the 5 part test eliminating the need for an ongoing relationship, the rule eliminates the 84-24 exemption for agents employed by insurance companies like Northwestern Mutual or MassMutual now treated as fiduciaries under the 4 part test, but would still apply to independent agents.

Fred noted that advisors wd be considered fiduciaries if they have discretion, say they are a fiduciary, the investor cd reasonably believe that the advice is individualized, and is believed to be in their best interest.

Meanwhile many associations called for more than 60 days to comment - NAPA defended fixed income annuities called out by the DOL and the Senate Education & Workforce Committee made snarky comments calling it the Retirement “Insecurity” Rule.


Just as the new DOL rule may inhibit IRA rollovers to higher cost funds, Morningstar and Envestnet have announced a new managed account service using Matrix as the custodian leveraging IRALOGIX’s institutionally priced investments.

Morningstar will leverage their managed account platform while Envestnet will provide fund selection and model portfolio services targeting smaller IRA accounts most without an advisor.


The Portability Service Network has gone live with 3 of the 6 founding members including Alight, Vanguard and Fidelity with the other 3, Principal, Empower and TIAA expected to be on board by the end of 2024.

The Network’s first mission is to facilitate automatic transfer of low balance accounts. The DOL is required to create a lost and found database by the beginning of 2025.

And while the Network is just creating a data exchange and protocol for small balance transfers, there is hope that these providers, along with other record keepers expected to join, can figure out transferability issues that are inhibiting the adoption of retirement income, as well as a way to safely share participants data with advisors to fuel financial wellness services.

Meanwhile, the initial launch, facilitated by the Retirement Clearing House, is a great beginning not just for the Portability Service Network but for the entire DCindustry.


Driven by lower costs, CITs have overtaken mutual funds in DC plans accounting for 36% of assets in 2022 compared to 34% for mutual funds according to a Cerulli report – in 2021 mutual funds had 37% compared to 35% in CITs. Cerulli noted that respondents wanted more training on CITs.

While the majority of CIT assets are in the institutional market, retail plans managed by RPAs are growing quickly led by Great Gray, formerly Wilmington Trust.

While no case has ruled that plans not using lower priced CITs with the same strategy as the mutual fund is an issue, given the expanding nature of ERISA lawsuits and growing use of CITs, it wd not be a surprise.


After years of telling the inexperienced financial advisors that they should stay away from defined contribution plans because of the complexity and fiduciary liability, the DC industry is now desperately trying to “activate them.”

So why now?

With the explosion of DC plans, which is only expected to accelerate, there is no way that the 13,000 DC specialists can handle all these new plans.

Read my recent column about why wealth advisors are expected to start paying more attention to DC plans and how that could affect RPAs.


So those were the most important stories from the past week. I listed a few other stories I thought were worth reading covering:

Please let me know if I missed anything or if you have any comments. Otherwise, I look forward to speaking with you next week on 401(k) Real Talk.


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