SURVEY SAYS: Anticipated 2016 Developments

Last week, I asked NewsDash readers, “What development are you most anticipating for 2016, and what is your second choice?”                

Nearly six in ten (57.5%) respondents work in a plan sponsor role, 17.5% are advisers or consultants and one-quarter work in a TPA/recordkeeper/investment manager role.

Perhaps not surprisingly, the top trend, product, regulation or legal ruling most anticipated in 2016 by more responding readers than any other is the final Department of Labor (DOL) fiduciary (or conflict-of-interest) rule (29%). This was followed by federal government seeking more revenue from retirement plan savings (15.8%), regulations about lifetime income illustrations on participant statements (13.2%) and more defined benefit (DB) plan sponsors transferring risk to insurance companies (10.5%).

Nearly 8% most anticipate more guidance about and implementation of annuities in defined contribution (DC) plans, 5.3% most anticipate final rules about the Internal Revenue Service (IRS) determination letter program, and 2.6% each most anticipate more guidance and establishment of state-run retirement plans, more provider consolidation, rollout of pre-approved plan documents for 403(b) plans, final guidance about cash balance/pension equity plans and rate of return, more requests from multiemployer DB plans to reduce benefits, outcome of the Intel lawsuit about risky investments in custom target-date funds, and more plans moving away from proprietary target-date funds (TDFs) as the qualified default investment alternative (QDIA). No one selected environmental, social and governance (ESG) investing in retirement plans and retirement plan shareholder activism as the most anticipated development.

For their second choice, more guidance about and implementation of annuities in defined contribution (DC) plans and federal government seeking more revenue from retirement plan savings came out on top with 18.9% of respondents each. The final DOL fiduciary (or conflict-of-interest) rule was selected as a second most anticipated development by 10.8% of respondents.

Eight percent of respondents each selected more guidance and establishment of state-run retirement plans, regulations about lifetime income illustrations on participant statements, final guidance about cash balance/pension equity plans and rate of return, and more plans moving away from proprietary TDFs as the QDIA as their second choice. More than 5% selected final rules about Internal Revenue Service (IRS) determination letter program, while 2.7% each chose more provider consolidation, rollout of pre-approved plan documents for 403(b) plans, and more DB plan sponsors transferring risk to insurance companies.

“Other” responses included the entrance of new providers, such as Betterment, in the DC space and getting final quarterly report guidance.

Though verbatim responses were few, there was a great sense of disappointment with the government’s efforts in the retirement plan industry among them. Editor’s Choice goes to the fortunate reader who said: “What I'm most excited about for 2016 is - RETIREMENT!”

Verbatim 

Delayed retirement; need to work longer; becomes a workforce planning issue

It will be interesting how big the retirement security topic will get in federal elections.

A sure bet -- you'll always be able to count on the feds to interfere and screw up all business and industry even more. Everything they touch breaks, and just like a 2-year-old, they have to touch everything.

With the recently enacted additional increases in PBGC premiums, the rush to the door will accelerate.

Many of my plan sponsors have asked for the lifetime income illustration on statements, but our I/T won't make the change until it is required. I know there are concerns with consistency of calculations between providers, so hopefully, the regulations will clarify and include specific formulas.

In both the health care and retirement plan arenas, it seems the federal government is doing all it can to push employers out of the picture without an effective national replacement.

We will probably end up with a new reg that no one was anticipating, such as the recent transportation bill that extended 5500 due dates!

3rd choice plans moving away from TDF as QDIA

I have nothing!

Continued stupidity from Washington.

What I'm most excited about for 2016 is - RETIREMENT!

here's hoping 2017 comes here quickly. Unfortunately politicians - and this Administration in particular - seem to think that a "legacy" is a terrible thing to waste. And we'll ALL pay the price for years and years to come.

NOTE: Responses reflect the opinions of individual readers and not necessarily the stance of Asset International or its affiliates.