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401(k) Real Talk Transcript for July 10, 2024

Transcript of Episode 113 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 omnichannel and CEO at TRAU, TPSU & 401kTV coming to you from steamy Jupiter - 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! 


The job market has definitely cooled – just 206,000 new jobs were added in June down from 215,000 in May which is the 3rd month of decline in a row. The unemployment rate is higher than it has ever been since November 2021 and June marked the slowest 3 month average job creation since January 2021. Professional and business sectors led those showing decline losing 17,000 jobs.

Jeff Schulze, Head of Economic and Market Strategy at ClearBridge Investments noted, “The June jobs report further cements that the labor market is nearing equilibrium,” which might lead, he said to, “the Fed to kick-off the long-awaited rate cutting cycle in September.”

There has been a shift of focus to retention v. recruitment while the continued labor shortage and wage increase has led to noticeable service declines with record keeper turnover for larger plans up 12% since 2022 according to a recent Cogent survey.


As DC plans continue to act more like DB plans, the question is whether private equity investments will become available to participants. According to a Blackstone study, 90% of wealth advisors allocate some portion of their client’s portfolio to private equity. And with just 15% of companies with $100 million or more in revenue public and fewer IPOs, to improve returns, DC participants are likely to turn to these markets just like DB plans and individual investors.

Like with retirement income, the roster of firms pushing for PE in DC is impressive led by Blackrock, Franklin Templeton, Legal & General, Appollo, Neuberger Berman and the Partners Group – the alternative investment association, DCALTA, boasts almost 70 members.

There are liquidity and fiduciary concerns which likely will mean that private equity will initially be included in professionally managed investments like TDFs and managed accounts though middleware may help, just like with retirement income.


To make RPAs and plan sponsors more comfortable with in-plan annuity products, fi360 recently launched a comparison tool using Cannex’s annuity database. Currently, it reviews 8 products growing to 15-20 soon using 60 criteria.

Though in-plan retirement income adoption is slow for many reasons, one may be the inability to compare products. But lurking is the public risk transfer lawsuits claiming that plan sponsors and their co-fiduciaries have not conducted proper due diligence on the carriers which may also dampen interest in retirement income as most RPAs acting as a co-fiduciariers do not have the required knowledge to make a prudent decision.


As 401(k) and 403(b) plans have evolved from a supplemental savings plan to a holistic financial and benefits tool, so has the role of the RPA who is arguably the most important vendor for retail plan sponsors.

The evolution of RPAs and the awakening of plan sponsors have coincided promising not just greater benefits for plan sponsors but most importantly for participants.

Read my recent column about how DC plan sponsors can use a simple RPA rating system which, along with required due diligence, should lead to dramatic improvements.


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

  1. 401Go’s CEO discusses how technology can help DC record keepers better serve the small/startup market
  2. DOL reports more study required for pension buyouts
  3. California adds high school literacy requirements
  4. Brokerage associations join the lawsuit against the DOL fiduciary rule

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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