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401(k) Real Talk Transcript for February 28, 2024

Transcript of Episode 95 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 most important and interesting ones providing open honest and candid discussion you will not get anyway else. So let’s get real! 


Another expert, Allison Schrager, a Bloomberg opinion columnist, predicts the demise of tax deferred, workplace 401k plans in the next 10 years. For years New School professor Teresa Ghilarducchi has advocated for a federal solution while more recently Boston College’s Alicia Munnell suggested the tax deferment, which is calculated at 1% of GDP, should be used to shore up Social Security.

While Schrager argues that the tax deferment should go away, she does believe that a more liquid emergency account should be made available to allow people to save.

And though not the same, IBM recently announced that the 5% match on 401k contributions will instead be deposited into a DB-like plan which could further diminish DC assets.

So while the debate continues, the success of DC plans which fuel IRAs accounting for over $20 trillion and the massive lobbying by providers will make the chances of Congress eliminating the tax deduction remote at best but it will force the industry to do better if they want to retain the deduction.


Addressing the difficulty caused by assets in multiple DC plans and IRAs, the GAO made certain recommendations mirroring 6 other countries. They suggested tasking one federal agency with establishing a participant dashboard and allowing for plan-to-plan auto transferability while providing guidance about the process to consolidate accounts.

The industry is addressing the issue through the Portability Service Network which now includes 6 of the largest DC record keepers accounting for 60 million participants while the DOL is scheduled to create a database by 2025.

The issue is real but requires industry cooperation, better technology and possibly data sharing all of which has been hard to come by.


No doubt that the explosion of small plans due to state mandates and tax credits in SECURE 2.0 as well as the convergence of wealth and retirement at work has piqued the interest of wealth advisors but, according to Envestnet’s Co-CIO and Group President, Dana D’Auria, more and better technology is needed.

Along with data, for wealth advisors to be able to efficiently help clients manage their DC plan and attract more wealth clients, there needs to be an integration with the wealth tech they use and eventually apps that consumers rely upon.

Envestnet is at the convergence of wealth and retirement with over 110,000 advisors on their platform. Along with other fintechs like Pontera and newly minted record keepers, fiduciary outsourcers and practice management providers will be leaning in.

The DC industry which has historically discouraged dabblers has changed its tune and must now embrace the 275,000 wealth advisors that do not focus on retirement to help the 12,000 experts who cannot possibly handle all the new plans and the convergence of wealth, retirement and benefits at the workplace.


The theme of Fidelity’s 2023 Plan Sponsor Attitudes Study is “Rising complexity creates opportunity for greater advisor impact.” As plan sponsors wake up realizing the impact that an objective fiduciary advisor can have on their plan and employees, they will demand more which is turn will cause massive advisor turnover.

Read my recent column about the disconnect between what plan sponsors value and how RPAs rate themselves and why there will be more advisor due diligence by 3rd parties just as advisors had advocated for record keepers and investments.


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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