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2021 Retirement Industry Milestones in Monthly Recap

401k Court Cases

The coronavirus pandemic notwithstanding, 2021 was an eventful year in the employee benefits/retirement plans space.  In case you missed it, here is a month-by-month recap, as recently reported in BenefitsPro:

January:  401(k) lawsuits soared, and the risk spread from larger employers, where it was largely concentrated, to smaller ones.

February:  Diversity, equity, and inclusion (DEI) took center stage as corporate disclosures revealed a lack of people of color in executive positions, on boards, and in certain industries, such as financial services.

March:  Student loan debt soared to record levels.  Currently, more than 44 million Americans owe some student debt, to the tune of $1.5 trillion.  More employers are considering offering student loan repayment assistance, many in the form of matching contributions to retirement plans as employees contribute toward paying down their debt, killing two birds with one stone.  Federal forgiveness and deferment initiatives are important to watch as 2022 unfolds.

April:  The Department of Labor provided cybersecurity guidelines for retirement plans.  Advisors sought opportunity to provide additional value in this arena in an industry increasingly under fee pressure.

May:  State-sponsored retirement plans proliferated.  Specifically, states began to offer or put in place the infrastructure to offer retirement plans for small business employees who didn’t previously have access to one.  Pooled employer plans (PEPs) also appeared on plan sponsors’ radar.

June:  Annuities in retirement plans materialized as more of a reality, thanks in part to the SECURE Act of 2019.

July:  Recordkeeper consolidation continued apace, and Empower – one of the largest recordkeepers – announced it was acquiring Prudential’s retirement business.

August:  2022 Social Security COLA speculation abounded as pundits wondered how large that adjustment would be.  As we later found out, beneficiaries received a whopping 5.9% increase, helping to strengthen a wobbly three-legged retirement stool.

September:  Employee benefits/insurance companies and retirement advisory firms continued to combine.  This ongoing M&A is a trend to keep an eye on in the coming year.

October:  A large number of older workers retired early from the workforce, spurred by higher home and investment values, while guaranteed income in retirement plans gained additional ground.

November:  Rampant consolidation continued to drive down fees, particularly for advisor solutions.

December:  Comments continued on the DOL ESG rule, and President Biden extended the pause on student loan repayments to May 2022 – good news for America’s student debt holders, albeit temporary.

2022 will likely be another interesting and event-filled year as the industry morphs and shifts in new directions.  Stay tuned here as we bring you the latest developments.

Steff Chalk

Steff Chalk

Managing Editor at 401kTV
Steff C. Chalk is Executive Director of The Retirement Advisor University, a collaboration with UCLA Anderson School of Management Executive Education. Steff also serves as Executive Director of The Plan Sponsor University and is current faculty of The Retirement Adviser University.
Steff Chalk
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