Top Issues Facing the Retirement Industry in 2017
What are the top issues facing the retirement industry, retirement plan sponsors and their employees in the next few years? According to the hundreds of Retirement plan advisors gathered in Las Vegas for the National Association of Plan Advisors (NAPA) Summit, top retirement issues emerging as “game-changers” are likely to be related to:
- tax reform,
- behavioral science,
- Multiple employer plans (MEPS), and ,
- retirement readiness and health savings accounts (HAS’s).
As usual one of the top issues addressed at the NAPA Summit was the issue of retirement readiness. This should come as no surprise, it’s the main reason the retirement industry exists. This year at the NAPA Summit, an increasing number of featured speakers focused on the topic of behavioral science and behavioral finance. Specifically, scientific research has shown that the way you speak to your employees has a profound impact on their retirement success. So be prepared for the new language of the retirement industry as technology and science enter the lexicon.
Tax reform and HSA’s are related topics as the Trump Administration has expressed their intention to reform health care by virtue of using HSA’s to a certain extent. If enacted, the tax code will likely be modified to accommodate for the HAS’s deferrals. This has the potential to be as profound a change as ERISA or the Pension Protection Act of 2006. If enacted, this will add an additional burden and host of requirements for both sponsors, record keepers and advisors.
MEPS were also a hot topic and not surprisingly either. MEPS are a fast-growing segment of the retirement plan marketplace as companies look to gain fee reductions and efficiencies once enjoyed only by larger plans. Participating in a MEP can effectively “level the fee and service playing field.”
The most important topic once again is the state of retirement readiness. American workers continue to show large gaps in retirement savings and readiness. There is an enormous effort on-going within the retirement plan advisor industry to find solutions to this potentially catastrophic event.
