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401(k) Real Talk Transcript for February 14, 2024

Transcript of Episode 93 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! 


With almost every state and some municipalities offering or mandating an auto IRA plan, it’s obvious that a federal program is not only needed but also inevitable.

Rep Richie Neal, ranking member of the House Ways and Means Committee has proposed a federal IRA mandate for employers with 10 or more workers with a 6-10% deferral rate and auto escalation of 1% annually up to 10%. There’s also a pension like guarantee for larger accounts.

Unlike his previous proposal which included a 5% govt match and was viewed as too competitive with private plans, this proposal, sans match has garnered, broad industry approval.

Getting any bill passed is tough but retirement legislation seems to be the exception and a federal mandate with consistent national policies not only makes sense but would further accelerate the explosion of small plans already under way as most employers will opt for a private solution.


Concerns about cybersecurity are heating up especially among larger DC plans many of which are turning to 3rd parties to review the security of their record keeper as well other vendors like consultants, advisors and managed account providers.

The DOL has issued cyber guidance recently following the direction laid out by SPARK and is raising the issues during audits and investigations.

Along with working with participants and managed accounts & retirement income solutions for older workers, helping plan sponsors with cybersecurity concerns will enable advisors to differentiate themselves beyond the Triple Fs.


Are DB plans coming back? Industry experts and investment consultants are watching closely whether the move by IBM, a noted trendsetter, will start a wave of new pension plans.

IBM recently eliminated their 5% match which now goes into a DB-like account which participants cannot contribute to and offers a 6% guaranteed return for 3 years and then follows treasury rates currently at 4.2%. With DB plans fully funded for the 1st time since 2008 other plans, especially overfunded plans, are considering the IBM model.

It may also be a way for smaller plans to attract and retain new workers while not costing more as the war for talent continues.


With more advisors over 70 than those under 30 years old and 36% expected to retire in the next 10 years, the need to attract and retain younger advisors is dire especially on the eve the expected greatest wealth transfer in history with $68 trillion moving from baby boomers to their heirs.

Yet Cerulli reports that 75% of advisors depart the profession within 3 years. It’s a dilemma the financial industry has not figured out as traditional recruiters and trainers like wirehouses and insurance companies do not seem to be attractive to younger workers.


Vestwell released their annual Retirement Industry Trends report highlighting where workplace plans are headed and what participants expect including:

  • The ability of 93% of workers with student loan debt to save has been inhibited which will only get worse with the recent resumption of loan repayments. A vast majority not only want help from their employer they are more likely to stay if they do.
  • Demand for 529 plans is rising
  • Increasing demand for access to an advisor as well as managed accounts and digital tools
  • Retirement plans are no longer a perk as 85% expect their employer to offer one while ancillary services like emergency savings and HSAs continue to grow.

All of which highlights 2 global trends—the increase of new plans and the convergence of wealth and retirement at the workplace.


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 would like to comment. Otherwise I look forward to speaking to you next week on 401k Real Talk.


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