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But It’s a Dry Heat: Hot Topics in Retirement.

By Jack Towarnicky

Welcome to PSCA’s 71st Annual National Conference, May 1–2, in Scottsdale, AZ.  Come learn from our ERISA legal experts as they discuss/debate Cybersecurity, Litigation, and Retirement Income/Decumulation:  Thomas E. Clark Jr. JD, LLM, Of Counsel, The Wagner Law Group; The Honorable Phyllis C. Borzi, Former Assistant Secretary of Labor for the Employee Benefits Security Administration (EBSA) (2009-2017); Krista M. D’Aloia , Vice President and Associate General Counsel, Fidelity Investments; Marjorie Mann, Senior Attorney, NextEra Energy, Inc.  

Risk of Loss
As a Baby Boomer myself, my ears always prick up when the topic will be legal challenges or risk of loss from:
Cybersecurity (risk of loss of retirement savings assets), 
Litigation (defending claims as a plan sponsor and/or fiduciary), and/or 
Retirement Income/Decumulation (sequence of returns risk, longevity risk, etc.) 

Those are three of the hottest topics in today’s retirement industry.  What makes them so hot?:

  • “Red Hot”:  Individual Retirement Accounts and/or 401(k)/403(b) plans have been readily available since 1982 - many Baby Boomers have a lifetime of savings in their tax-preferenced retirement savings plans/programs. 
  • White Hot”:  An estimated 10,000+ Baby Boomers will retire every day until 2029.   

It’s Math – Subtract Before You Add, or Multiply (legislation, regulation, litigation)
Compliance is a challenge for most plan sponsors.  Let’s have a discussion/debate over past/potential legislation, regulation and litigation before making new additions to the compliance burden.  Consider:   

  • Cybersecurity:   Many plan sponsors think HIPAA when they think of employee benefit security issues.  The Health Insurance Portability and Accountability Act of 1996 (HIPAA) became Pub.L. 104–191 when President Bill Clinton signed it on August 21, 1996 – over twenty years ago.  Tens of billions have been spent to achieve compliance in safeguarding “protected health information”.  But, did you know that the HIPAA statute does not even include the term “protected health information” nor the acronym “PHI”?  HIPAA was intended to improve:  “… portability and continuity of health insurance coverage in the group and individual markets, to combat waste, fraud, and abuse in health insurance and health care delivery, to promote the use of medical savings accounts, to improve access to long-term care services and coverage, to simplify the administration of health insurance, and for other purposes. …”  A retirement version might also focus on:  (1) security , (2) portability (reducing leakage), and (3) continuity of savings/improved access (facilitating rollovers, loan repayments after separation, use of individual account plans (including HSAs) and Deemed IRAs).  But simplify, nah! 
  • Litigation:  Definition of Fiduciary, Mandated Disclosures , ERISA Preemption (State/Local IRA & Sick Leave Mandates), etc. 
  • Retirement Income/Decumulation:  Lifetime Income projections, selection of annuity providers, in-plan payout options/innovations, etc.   

Come join us in Scottsdale.  The average high temperature in May is 93°F - plenty hot enough for any plan sponsor!    

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