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Exclusive Interview: Wells Fargo Head of Retirement Outlines Future of DC Industry at Inflexion Point

Fred Barstein

Fred Barstein Editor-in-Chief, 401kTV

Fred’s Take: The pending DOL conflict of interest rule is not causing massive changes in the defined contribution (DC) industry but it is highlighting and perhaps accelerating them. Joe Ready, head of Wells Fargo Institutional Retirement and Trust with over 4 million participants reviews the biggest challenges and changes in the DC market to come many of which are covered in the DOL rule.

Part of the changes are happening because of the growing importance of DC plans not just in saving for retirement but also in retirement as more people are likely to keep them money in 401k and 403b plans rather than roll them over into an IRA. The DOL may be a catalyst for this development as their new rule puts greater restrictions on IRAs causing more people to leave their money in their DC plan. What does that mean for plan sponsors and what new products and services need to be developed to meet the needs of retired workers?

One big change will be new retirement income products developed to meet these new needs. Joe sees potential for non-guaranteed income funds as well as integration with Social Security and annuities.

Finally, target date funds (TDFs) will likely evolve to be more personalized according to Joe. Rather than a full scale move to managed accounts, there will likely be a hybrid approach with more customized solutions.

Retirement and DC plans are evolving at a pace we have never seen with the DOL highlighting and accelerating the movement. Plan sponsors need to understand these changes and adapt for what’s best for them and their evolving employee population.

Fred Barstein

Fred Barstein

Founder & Editor-in-Chief at 401kTV | TRAU | TPSU
Fred Barstein is the Founder & Editor-in-Chief of 401kTV. Fred is also the Founder and CEO of The Retirement Advisor University (TRAU), a collaboration with UCLA Anderson School of Management Executive Education and The Plan Sponsor University (TPSU).Mr. Barstein was also Founder and Editor-in-Chief of NAPA Net.
Fred Barstein

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