ASK THE EXPERTS – A Look Back, A Look Ahead

 Interview Conducted by Roberta Hess of Princeton Marketing

A Look Back, A Look Ahead

Matt Schoneman, President of The Retirement Advantage, Inc. (TRA), shares his perspective on the retirement industry in 2021 — and looks to what’s ahead for the industry in 2022.

What were the year’s most noteworthy developments for the retirement industry?

The SECURE Act is just now really sinking in — and taking hold. Finally, we’re really experiencing the impact of the legislation, which for the most part is welcome. The increase in the tax credit for start up plans is huge. And this is the year we started to track long-term, part-time employees, who will be eligible to enter their workplace retirement plans in 2024.

As of mid-November, we haven’t yet seen new retirement legislation finalized. Despite the ongoing back-and-forth, the key outcome of new retirement legislation will likely increase the number of employers offering 401(k) plans and the employees eligible to participate in plans. State-run plans are peeking around the corner, but at this time it’s hard to determine how much of a factor they will become.

Looking ahead to 2022: What are the top trends that you see unfolding that retirement plan sponsors should start preparing for now?

First, I think that plan sponsors will at last “come to grips” with their fiduciary role, fully understanding all the responsibilities that they’ve taken on. This will likely lead many of them to turn to third-party administrators like TRA to help them manage their fiduciary duties and risk. Also, I think more employers will utilize payroll providers who can integrate with recordkeepers.

Cybersecurity will continue to capture the headlines and pose threats to our industry. Fortunately, most 401(k) plan service providers have taken the lead, as TRA has, to stay in front of cyber threats. I expect we’ll see more plan sponsors acknowledging the true and dangerous threats that are constantly evolving, and will take steps to further protect their businesses and their retirement plans.

What do you think financial advisors need to know to manage and grow their retirement business in 2022?

Most important: Demonstrate your value by knowing the ins and outs of 3(16) fiduciary services and plan document maintenance programs — and then tell your clients about them. (We offer both at TRA.) We find that for many plan sponsors, costs are becoming less of a factor, and they are willing to pay for services that help their plans run smoothly. These services also help financial advisors stay focused on managing and growing their business, instead of worrying about plan administration.

If advisors would like to more about TRA’s 3(16) fiduciary services and Plan Document Maintenance Program, they should reach out to their Regional Sales Consultant.

Can you share any major plans or new initiatives for TRA in 2022?

As 2021 draws to a close, we’re wrapping up TRA’s 25th anniversary year. I want to thank the employers, financial advisors, and industry service providers who have made our success possible over the past quarter century. And I want to acknowledge TRA’s employees, who demonstrate the highest level of commitment every day.

In 2022, our plans are to stay with the strategy that has enabled us to become one of the nation’s largest third-party administrators and a trusted partner of employers, advisors, and service providers throughout the retirement industry. This means, first and foremost, maintaining our dedication to the highest level of service. And, at the same time, we expect to continue to expand through acquisitions that align with our business goals.

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