401k Plan Insights: Trends, Research, Analysis, and White Papers

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Insights: Trends, Research, Analysis, and White Papers

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Many Small Biz Owners Not Saving for Retirement: Survey

A recent report from WealthRabbit highlights a significant retirement crisis among small business owners, revealing that one in five have no retirement savings, and most have saved less than $50,000. Many may rely on the sale of their business for retirement funds, but one in three respondents doubt they will ever be able to retire. The 2025 WealthRabbit Small Business Retirement Report indicates that the traditional retirement system is failing this demographic, with women particularly affected, being twice as likely as men to have no savings.

Source: 401kspecialistmag.com, May 2025

2025 PLANADVISER Adviser Value Survey

The 2025 PLANADVISER Adviser Value Survey reveals that 46.3% of plan sponsors using an adviser value "evaluation and monitoring of investment lineup" the most. This finding highlights the key influence advisers have on retirement plan outcomes. The survey analyzes responses from the PLANSPONSOR Defined Contribution Survey, focusing on aspects like investment lineups, plan governance, fiduciary guidance, and plan design.

Source: Planadviser.com, May 2025

Emergency Savings Linked to Less 401k Loan Use, Stronger Retirement Outcomes

A February survey by National Debt Relief reveals that substantial debt is affecting Generation X and Baby Boomers, leading some to postpone retirement. Among 1,000 surveyed individuals, 45% reported carrying an average credit card balance of nearly $9,000, with monthly payments of around $418. Additionally, T. Rowe Price's annual Reference Point report highlights trends in retirement planning, showing a 4% increase in average loan sizes in 2024, slightly outpacing inflation, across all age groups. While loan usage among 401k participants grew by two percentage points from 2023, it remains lower than the peaks seen between 2015 and 2019.

Source: Planadviser.com, May 2025

Extending Retirement by 5 Years Skyrockets Chance of Depleting Retirement Savings

New research from Nationwide and The American College of Financial Services highlights a significant risk associated with extending retirement by just five years: it increases the likelihood of depleting savings by 41%, especially among healthy, higher-income retirees. This concern is further emphasized by Allianz Life's 2025 Annual Retirement Study, which found that 64% of Americans are more afraid of running out of money than dying. The study reveals a disconnect between rising lifespans, which now often exceed 90 years, and inadequate financial planning, leading many to face an increasing risk of outliving their savings.

Source: 401kspecialistmag.com, May 2025

How 401k Auto Portability Boosts Women's Retirement Savings

Income inequality significantly affects women's financial security, particularly regarding retirement benefits. In 2023, women earned, on average, 21.8% less than men, according to the Economic Policy Institute. A 2024 study by the TIAA Institute and Ipsos further revealed that women typically retire two years earlier, live three years longer, and have 30% less retirement income than their male counterparts, highlighting a critical disparity in financial preparedness for retirement. But, the Auto Portability Simulation by Retirement Clearinghouse suggests that if auto portability is widely adopted by retirement plan sponsors and recordkeepers, it could help preserve the retirement savings of 2 million women annually. Over a generation, this could lead to 111 million women preserving $753 billion in retirement savings in the U.S. system.

Source: Kiplinger.com, May 2025

How Does Your 401k Plan Stack up Against the Industry?

The ninth annual 401k Plan Benchmark Report by Judy Diamond Associates highlights the performance of 401k plans in 2023, showcasing both high and low performers across various industries and company sizes. The top five industries with the best 401k plans include financial advice/investment activities, certified public accountants, legal services, financial and insurance services, and engineering. The report analyzed around 640,000 active 401k plans with minimum asset levels, representing about 74 million eligible workers and $8 trillion in assets across 27 industry categories. The data is derived from Form 5500 filings for the 2023 plan year, reflecting the latest available information.

Source: Napa-net.org, May 2025

National Survey Reveals Growing Demand for Access to Nasdaq-100 Index in 401k Plans

The Annual Nasdaq-100® Retirement Plan Survey found that nearly 80% of 401k participants see the value of including Nasdaq-100 products in their investment options, highlighting a growing market opportunity. Surveying 1,000 participants aligned with 2023 U.S. Census demographics, revealed strong demand for the tech-focused Nasdaq-100 Index, which has a 40-year track record and over $300 billion in assets.

Source: Prnewswire.com, April 2025

Retirement Confidence Remains High, As Does Interest in Income Options

The 2025 Retirement Confidence Survey by the Employee Benefit Research Institute and Greenwald Research found that most American workers (67%) and retirees (78%) feel confident about living comfortably in retirement. The survey, conducted from January 2 to February 3 with 2,767 participants, revealed that retiree confidence rose by four percentage points compared to last year, while worker confidence decreased slightly by one percentage point. Both groups remain concerned about inflation and potential Social Security cuts.

Source: Planadviser.com, April 2025

Case of the Week: Embezzlement -- Are Plan Assets Safe?

The ERISA consultants at the Retirement Learning Center responded to a financial advisor's inquiry regarding whether a business owner could use a terminated employee's 401k plan balance to compensate for losses caused by that employee's embezzlement. This scenario reflects a broader concern about 401k plan embezzlement and the legality of accessing a former employee's retirement funds to alleviate business losses. The question highlights the complexities surrounding 401k plan balances and the implications of employee theft on a business's finances.

Source: Napa-net.org, April 2025

Report Raises Eyebrows About Claims of Rampant "Red Flags" in Retirement Plans

An expert criticized a recent analysis highlighting extensive ERISA noncompliance as "scaremongering." In January, the New York-based consulting firm Abernathy Daley released a report claiming that approximately 84% of U.S. retirement plans exhibited at least one "red flag" indicative of a potential violation of ERISA. However, some industry professionals have disputed the firm's assertions regarding the prevalence of compliance risks.

Source: Hrdive.com, April 2025

Will the Average Retirement Age Keep Rising?

After nearly a century of decline, work participation among older men stabilized in the 1980s, and since the early 1990s, the average retirement age has risen by approximately three years. The question now is whether the factors that contributed to this increase over the past three decades will continue to extend the retirement age, or if their impact has largely played out. The final section of this piece argues that the influences driving higher participation rates among older workers may be reaching their limits, indicating that further increases in the average retirement age are unlikely.

Source: Bc.edu, April 2025

Creating the "Next-Gen 401k Report"

The "Next-Gen 401k Report" by KWP Growth Partners is set to launch on April 8, highlighting twelve key trends that are transforming retirement plans. The report showcases 60 innovative, digitally-focused companies that are leading changes in the workplace retirement plan sector. Will Prest and Lisa Kottler from KWP will discuss the report's insights and its significance for firms in the workplace retirement plan ecosystem in a podcast episode.

Source: 401kspecialistmag.com, April 2025

Adding Emergency Savings Solutions to Retirement Plans

In 2017, a Federal Reserve report revealed that 40% of Americans could not afford an unexpected $400 expense, highlighting a significant financial insecurity issue. The introduction of SECURE 2.0 has now added in-plan emergency savings solutions for plan sponsors, offering new methods to enhance financial security. The focus over the past five years has been on understanding how short-term savings relate to long-term financial stability, and how 401k plans can incorporate these insights to improve participants' financial wellbeing.

Source: Blackrock.com, April 2025

Plan Sponsors Focus on Retirement With Lifetime Income

Amid concerns over inflation and market volatility, plan sponsors are dedicated to maintaining workers' financial well-being. According to MetLife's 2025 Enduring Retirement Model Study, 82% of plan sponsors are committed to not cutting retirement benefits, citing reasons such as attracting and retaining talent (69%), demonstrating a long-term commitment to employees (57%), and supporting workers in feeling financially prepared for retirement (52%). Additionally, 90% of employers acknowledge that some workers are delaying retirement due to financial constraints, with 64% attributing the delays to lack of affordability.

Source: 401kspecialistmag.com, April 2025

Anxiety Drains Interest in Saving for Retirement: Study

A recent survey by the Employee Benefit Research Institute reveals that workers experiencing acute financial stress prioritize retirement savings less than average. The top financial stressors for participants were daily bills (60%), unexpected emergencies (46%), and job security (33%), while only 19% cited "saving enough for retirement." Notably, 64% of respondents had an income below $50,000. In contrast, a similar survey conducted by EBRI in 2024 indicated that saving for retirement (48%) was a primary concern among a broader sample, highlighting the impact of financial stress on retirement planning.

Source: Asppa-net.org, April 2025

Decumulation Strategies: Creating Lifetime Income From Defined Contribution Plans

Employer-sponsored defined contribution plans are crucial to the American retirement system, providing participants with various strategies to spend their retirement assets. Before the SECURE 1.0 Act, insurance-based options within DC plans were limited, but the act, passed in late 2019, introduced fiduciary safe harbors that facilitate the selection of annuity providers. This regulatory change has led to a greater availability of insurance-based offerings in the market. However, the adoption of these strategies by plan sponsors has been slow as they become more familiar with annuities. This 20-page white paper outlines the current insured and non-insured options available for employer-sponsored retirement DC plans.

Source: Actuary.org, March 2025

Asset Managers Reevaluate Guaranteed Income Components in DC Plans

Despite the advantages of annuities, retirement plan participants still hold significant negative sentiment toward them. According to the latest Cerulli Edge -- U.S. Retirement Edition, 91% of asset managers believe annuity products have a negative stigma, up from 79% in 2019. While the proportion of those who "strongly agree" has decreased slightly, overall agreement has increased, highlighting a growing recognition among asset managers of the enduring stigma surrounding annuities. Asset managers and recordkeepers are advised to market guaranteed income products as part of a diversified retirement income strategy instead of presenting them as a complete solution.

Source: Cerulli.com, March 2025

To Reduce Retirement Plan Risk, Balance Stability & Security

Retirement programs, whether in the public or private sector, single-employer or multiemployer, and whether defined benefit or defined contribution, represent a long-term commitment by plan sponsors to serve the interests of both recipients and the sponsors themselves. Two key components of successful retirement programs are stability and security. This article explores the significance of stability and security in retirement plans and their role in meeting these objectives.

Source: Segalco.com, March 2025

Johns Hopkins Study: Private Equity, 401ks Do Not Mix

Recent research from Johns Hopkins Carey Business School raises concerns about the push for defined contribution plans to invest in private equity, particularly leveraged buyout funds. The study suggests that private equity may be riskier than the traditionally used publicly traded funds in 401k plans. Given that private equity funds involve pooling money from a limited number of investors to buy privately held companies with minimal public reporting, the report questions whether these investments align with the safety and transparency that workers typically expect from their retirement plans.

Source: Plansponsor.com, March 2025

A Review of Existing Measures of Retirement Well-being

Research indicates that many U.S. households are unprepared for retirement, potentially falling short of maintaining their standard of living. However, despite concerns about financial readiness, most retirees express satisfaction with their lives. An analysis of various datasets reveals that objective measures like health and income are not strong predictors of personal satisfaction. This disconnect implies that traditional satisfaction surveys may not effectively inform policymakers about financial security. To better assess retirees' well-being, new metrics could focus on spending habits, responses to emergencies, and expense shocks.

Source: Bc.edu, March 2025

Many Plan Sponsors Don't Feel Responsibility for Participant Retirement Goals

A recent survey by MFS Investment Management revealed that plan sponsors received a C+ grade regarding their confidence in participants' ability to retire when they want, while participants themselves expressed higher confidence. The survey found that plan sponsors who feel accountable for helping participants achieve their retirement goals are more optimistic about their chances of success. However, 66% of plan sponsors believe that it is the participant's responsibility to ensure they are invested appropriately to meet their retirement needs. Notably, 87% of participants regarded setting savings goals for retirement as their responsibility rather than that of the plan sponsor.

Source: Planadviser.com, March 2025

Do 401k Vesting Schedules Help With Worker Retention?

According to IRS rules, defined contribution plans must either immediately vest employer contributions or implement a cliff or graded vesting schedule. A cliff vesting schedule provides complete vesting at a specific point within three years, while a graded schedule allows for gradual vesting over six years. New research from Vanguard suggests that vesting schedules, traditionally used to encourage employee retention, may not be as effective as previously thought.

Source: Napa-net.org, February 2025

Lower Fees Could Drive Greater Managed Account Adoption Among Plan Sponsors

Defined contribution retirement plan sponsors are increasingly interested in providing personalized investment options for participants; however, access to managed accounts remains limited. A survey by PGIM DC Solutions reveals that 88% of plan sponsors believe personalized advice would enhance retirement outcomes. Despite this, only 60% of sponsors with assets over $100 million offer managed accounts, compared to just 35% of those with assets between $10 million and $99 million, indicating a significant gap in the availability of these solutions across different plan sizes.

Source: Planadviser.com, February 2025

Top Retirement Plan Trends to Watch in 2025

In 2024, the evolution of retirement plans has highlighted the shared responsibility of employees and employers in retirement planning, a trend set to continue into 2025. To retain top talent and aid employee future planning, plan sponsors are increasingly eager to adopt innovative strategies. This has led companies to seek assistance from advisory firms for tailored retirement plan design, implementation, and governance. Several key retirement plan trends are expected to emerge throughout the year.

Source: Planpilot.com, February 2025

The Limits of Behavioral Finance

A new study titled "Smaller than We Thought? The Effect of Automatic Savings Policies" examines the limitations of inertia in behavioral finance and automatic enrollment in retirement savings. It highlights that job changes can disrupt retirement savings due to vesting issues and the resetting of automatic enrollment and auto-escalation mechanisms. While the report acknowledges that these automatic systems yield positive outcomes, it suggests that their effectiveness may be overstated. The authors propose reducing access to retirement funds before retirement and implementing mandatory savings instead of allowing an opt-out option to enhance savings outcomes.

Source: Asppa-net.org, February 2025

Recordkeepers Slowly Integrating AI in DC Plans

As consumers increasingly adopt artificial intelligence tools like ChatGPT, the retirement planning industry is exploring their impact. Research from Cerulli Associates indicates that a few defined contribution plans are already integrating AI into their management and back-office operations. A survey of defined contribution investment-only asset managers revealed that 16% expect AI to have a "significantly positive" impact on legal document summaries, while 23% anticipate a "moderately positive" effect and another 23% foresee "slightly positive" outcomes.

Source: 401kspecialistmag.com, February 2025

Hands Off My 401k: American Retirement Savers Appreciate Their Plans Just the Way They Are

New research from the Investment Company Institute reveals that nearly 75% of Americans hold favorable views of 401k and similar defined contribution plans. The report, "American Views on Defined Contribution Plan Saving, 2024," emphasizes the benefits of employer-sponsored DC plans, such as employer contributions, diverse investment options, and tax-deferred growth. Sarah Holden, ICI Senior Director of Retirement and Investor Research, notes that 85% of participants find the tax benefits a significant motivator to save. The research indicates that most Americans, regardless of their retirement account status, trust the current system and do not favor changes.

Source: Prnewswire.com, February 2025

Vast Majority of 401ks Have a "Red Flag" Fiduciary or Regulatory Violation: Study

A recent analysis by Abernathy Daley 401k Consultants revealed that 84% of U.S.-based retirement plans show at least one potential ERISA red flag, indicating possible regulatory or fiduciary violations. The consultancy examined Form 5500 filings for 764,729 plans and identified over 600,000 companies at risk of fines, legal penalties, and fiduciary failures. Red flag violations are categorized into Regulatory Infraction Red Flags and Egregious Plan Mismanagement Red Flags, representing issues including infractions, fineable offenses, fiduciary failures, or plan malpractice.

Source: 401kspecialistmag.com, February 2025

AI Slowly Makes Inroads Into DC Plans

The retirement industry is exploring the integration of artificial intelligence to enhance functionality, as discussed in the latest Cerulli Edge -- U.S. Retirement Edition. Some AI applications are already being used in defined contribution plan management, with the potential to improve back-office operations. Adam Barnett, a senior analyst, emphasizes that asset managers and recordkeepers can significantly benefit from implementing AI in day-to-day tasks, such as enhancing legal document summaries and beneficiary designations.

Source: Cerulli.com, January 2025

Declining Interest in Student Loan Matches, PSCA Finds

The Plan Sponsor Council of America has been monitoring interest in the optional provisions of the SECURE 2.0 Act. Among these, the employee match provision linking 401k contributions to student loan payments has garnered significant media attention. However, actual interest and adoption by plan sponsors have been minimal and appear to be declining. PSCA continues to report on which provisions are being implemented by plan sponsors and which are being deferred.

Source: Asppa-net.org, January 2025

A Glimpse at Personal Finance in Australia, The United States, and The United Kingdom

The report analyzes financial behavior in Australia, the United States, and the United Kingdom, focusing on aspects such as spending, saving, retirement planning, and investment trends. It also assesses basic financial literacy by gauging respondents' understanding of essential financial concepts, aiming to reveal the relationship between financial knowledge and practical behavior. Through this analysis, the report aims to enhance the understanding of global financial habits and the confidence gaps that impact these behaviors.

Source: Checkbox.com, January 2025

Key DC Trends Shaping the Retirement Industry in 2025

The T. Rowe Price annual U.S. Retirement Market Outlook webinar for 2025 discussed key themes including retirement income in defined contribution plans, fiduciary responsibilities, and ESG investing. Michael Davis, head of global retirement strategy, emphasized the need for industry leaders to adapt to the evolving retirement landscape. Panelists, including Kathryn Farrell, Jessica Sclafani, Rachel Weker, and Aliya Robinson, highlighted important topics such as the advancement of qualified default investment alternatives, retirement income solutions, emergency savings accounts, and potential policy changes under a new Trump administration.

Source: 401kspecialistmag.com, January 2025

How to Improve Women's Retirement Security in 2025

Saving for retirement poses significant challenges for many, and recent data indicates that women are particularly concerned about their retirement savings. Nearly half of women find the decision-making process for retirement savings complicated and confusing, while about 60% feel they lack sufficient income to save adequately. Contributing to these concerns are factors such as women's roles in caregiving, lower average earnings compared to men, and a longer average lifespan. Statistics show that women aged 50 and older hold only 77 cents in wealth for every dollar held by men, highlighting the disparity in financial security. As such, women must plan for their financial future and for policymakers and employers to aid in these efforts. The article suggests three steps to enhance retirement security for women.

Source: Dol.gov, January 2025

Automatic Plan Features for Employees

Retirement savings are essential for financial security, but many employees do not save enough. Research indicates that younger employees (38%) are more likely than older employees (25%) to contribute less than 5% of their income to retirement. This savings gap is also evident across different genders, ethnicities, and income levels. To address this, implementing automatic 401k programs can simplify enrollment and encourage higher contributions over time. Understanding demographic differences in saving behaviors can help optimize plan designs to boost employee engagement and financial wellness. This 3-page paper discusses automatic 401k programs, strategies to close the retirement savings gap, supportive legislation, and employer benefits.

Source: Bofa.com, January 2025

Generation Beta: Redefining Life, Longevity, and Retirement

This 34-page white paper introduces a new generation starting on January 1, 2025, known as Generation Beta, comprising individuals born between 2025 and 2039. This generation is expected to experience significant technological advancements, changing societal norms, and economic transformations, leading to potentially the longest lifespans in history. The study highlights the challenges and opportunities that will shape Generation Beta's lives, emphasizing flexibility in work and family structures as key characteristics of their experience. Overall, Generation Beta is positioned to redefine concepts of life, longevity, and retirement in unprecedented ways.

Source: Prudential.com, January 2025

Adoption of Optional SECURE 2.0 Provisions Still Slow Going Into 2025

An Alight survey reveals that employers are cautiously implementing optional provisions from the SECURE 2.0 Act of 2022 as 2025 approaches. Although there is interest in features like hardship self-certification, adoption of emergency sidecar accounts and student loan matching remains low. For example, only about 30% of employers have adopted hardship self-certification, with 15% planning to add it soon; over half of those intend to implement it in 2025.

Source: Plansponsor.com, January 2025

The Why, What and How of Plan Benchmarking

A review of methods for assessing retirement plan costs reveals their importance, as highlighted by Callan's 2024 DC Trends Survey. Approximately two-thirds of plan sponsors plan to conduct a fee study in 2024, with many likely to evaluate various fee types, including managed account service fees and indirect revenue. There is also a significant trend towards adopting lower-cost investment options, with half of the respondents indicating they may switch to cheaper vehicles, an increase from 42% in 2023. Many sponsors have successfully reduced fees after benchmarking their plans.

Source: Plansponsor.com, January 2025

Retirement Plan Benchmarking: "More Art Than Science"

Experts emphasize that evaluating retirement plans requires a more nuanced approach than just assessing costs and investment performance. Jamie Curcio points out that assessing a company's retirement plan against its peers should be tailored to the specific company. The fiduciary obligation for plan sponsors to benchmark their plans should involve a deeper analysis to ensure they meet their goals effectively. With the prevalence of automatic features in retirement plans, measuring success should extend beyond just participation rates to include engagement and effectiveness in meeting participant needs.

Source: Plansponsor.com, January 2025

Beyond TDFs

Target-date funds have become the leading option for retirement savings, particularly as the default investment choice for employees in defined contribution plans. David Blanchett from PGIM DC Solutions points out that TDFs effectively provide professionally managed portfolios based on age. However, he notes that optimal portfolios may differ even among individuals in the same age group. As the retirement landscape evolves, various professionally managed solutions will emerge, ranging from established options like stable value funds to newer alternatives like adviser-managed accounts. The success of these solutions will hinge on their adoption by plan advisers and sponsors.

Source: Planadviser.com, January 2025

Safeguarding Retirement in the Age of Scams

Every year, millions of older Americans face scams and fraud that threaten their retirement security. Common scams include impersonations of government agencies, banks, investment schemes, fake sweepstakes, tech support fraud, and romance scams, with new variants continually emerging. The financial services industry, retirement plan sponsors, and participants can take proactive steps to reduce scam risks. This includes utilizing technology for account verification and monitoring, educating employees on identifying scams, and encouraging participants to recognize fraud indicators and add trusted contacts to help oversee their financial accounts as they age. This is a 22-page paper on the issue.

Source: Ssrn.com, December 2024

What Is the Real Revenue Cost of Retirement Tax Incentives?

The Joint Committee on Taxation has projected that defined contribution plans will lead to a $1.4 trillion loss in federal tax revenue over the next decade, a figure that is expected to be central in upcoming tax policy discussions. However, industry advocates, including the American Retirement Association, argue that this analysis is misleading. They contend that the cash flow approach used by the JCT overstates the long-term revenue impact of tax benefits like retirement plan tax deferrals. Proponents favor a net present value model, asserting that it better reflects the true costs of these tax expenditures, as retirement plans are designed for long-term savings and tax recoupment occurs over many years. They criticize the JCT's methodology as failing to accurately assess the value of tax benefits over the necessary time frame for retirement savings.

Source: Psca.org, December 2024

What the Crystal Ball Says for 2025 Retirement Industry Trends

As the new year begins, industry experts are sharing predictions for the retirement sector, with a key trend being the rise of in-plan retirement income solutions. The Institutional Retirement Income Council expects a significant wave of innovation and adoption of these solutions by 2025, driven by growing interest from plan sponsors, providers, and participants. Additionally, a report from Mercer highlights that retirees face challenges in managing their savings throughout retirement, particularly in dealing with unexpected financial issues and sustainable spending. The IRIC also identified a few additional trends it believes will have a significant impact on retirement plans and participants in 2025.

Source: Napa-net.org, December 2024

CAPTRUST's 2025 Retirement Plan Industry Predictions

The retirement plan landscape is expected to undergo significant changes due to legislative shifts, economic conditions, and trends in plan design and participant engagement. In 2024, with stabilized economic conditions and the Federal Reserve cutting interest rates, retirement plan sponsors are focused on enhancing participant experiences and outcomes. Existing trends are accelerating while new ones are emerging. As 2025 approaches, employers will need to remain adaptable to navigate changes in investment options, regulatory adjustments, and evolving employee needs. CAPTRUST leaders provide insights and predictions for these upcoming developments.

Source: Captrust.com, December 2024

401k Plans, 2025, and the 401k Plan Sponsor

The article reflects on the changes in the 401k plan business since the author started in 1998, noting how different it is today compared to the past. It emphasizes the importance for plan sponsors to stay ahead of potential changes in 401k plans. This publication provides detailed insights.

Source: Jdsupra.com, December 2024

Half of Women Retirees Say Retirement Is Pricier Than They Expected

A recent survey by Morning Consult for Corebridge Financial reveals that only 20% of retired women feel their retirement matches their expectations, while 25% find it completely different from what they anticipated. The primary surprise for these women is the cost of retirement, with 50% stating it has been more expensive than expected. Despite 51% reporting their financial health as good or very good, 63% wish they had started saving earlier. Corebridge Financial's retirement services president, Terri Fiedler, noted the disconnect between expectations and reality in retirement experiences.

Source: Hrdive.com, December 2024

Crypto Investments and Your 401k: What's Being Done to Protect Your Retirement Savings?

This article by the U.S. Government Accountability Office discusses the introduction of cryptocurrency investments in 401k plans and the associated risks and regulatory concerns. It makes six key points. The article advises that while crypto might offer potential high returns, the volatility and regulatory environment pose significant risks to retirement security. The GAO recommends better data collection and regulatory oversight to protect investors.

Source: Gao.gov, December 2024

2025 Is Right Around the Corner: What's Lurking There for You?

In the past five years, retirement plans have faced numerous legal and regulatory changes, and more are expected in 2025. The upcoming year will bring obligations due to new laws and government guidance that may impact existing options. This summary aims to highlight key issues that plan sponsors should prepare for in 2025.

Source: Ferenczylaw.com, December 2024

34% of Gen Z Canadians Relying on Inheritance to Meet Retirement Goals: Survey

A recent survey by Vanguard Group Inc. reveals differing perspectives on inheritance among Canadians. While 34% of Canadians aged 18 to 34 view an inheritance as crucial for retirement, only 31% of baby boomers expect to leave money for their children. Over half of Gen Z respondents anticipate receiving an inheritance, but 39% don't see asset transfer as important. Additionally, 35% of those 55 and older are worried about needing their assets for health care, extended retirement, or living costs.

Source: Benefitscanada.com, December 2024

Retirement Industry Trends to Look Out for in 2025

A recent report from the Institutional Retirement Income Council suggests that as we approach 2025, there will be a significant increase in the adoption and innovation of retirement income solutions. This trend stems from both employers and participants seeking guaranteed income options in response to rising costs and lower savings. According to a 2024 Invesco report, 54% of participants would prefer to remain in their employer's plan post-retirement if it included a monthly payout feature. However, a separate Allianz Life study reveals that only 44% of Americans currently have a strategy for generating retirement income, even as plan sponsors are beginning to incorporate guaranteed income options. With the decline of traditional pensions, there is an anticipated growth in the demand for these retirement income features.

Source: 401kspecialistmag.com, December 2024

TIAA Survey Sees Growing Demand for Lifetime Income in Retirement Plans

A recent survey by TIAA reveals that while there is a growing interest in lifetime income offerings like annuities among employers, a significant 63% of respondents struggle to understand their value and importance. The survey, titled "Building a Better Retirement 2024," highlights the potential for increased adoption of these products following the SECURE Act, which aimed to simplify retirement savings through annuities. However, the lack of "annuity fluency" among decision-makers may impede their broader implementation in defined contribution plans.

Source: Prnewswire.com, December 2024

The Role of Behavioral Finance in Retirement Plan Participation

Behavioral finance studies how human psychology affects financial decision-making and market movements. It posits that individuals often act irrationally, influenced by biases, cognitive shortcuts, and emotional behaviors, which can hinder their enrollment and success in retirement plans. By understanding these behavioral tendencies, plan sponsors can design retirement plans that better encourage employee participation and contributions, ultimately helping them achieve their savings goals.

Source: Planpilot.com, December 2024

Rothification, AI Advancements Among Expected Retirement Plan Trends for 2025

Looking ahead to 2025, Amber Brestowski from Vanguard discusses anticipated trends in retirement plans that plan sponsors should consider. Key predictions include a focus on tax efficiencies, the rise of Roth contributions -- expected to be included in nearly all plans by 2026 -- and the integration of artificial intelligence in retirement services. Brestowski highlights that AI will enhance the efficiency of call centers by providing service associates with valuable data insights into participants' financial needs, ultimately improving support for retirement savers.

Source: Plansponsor.com, December 2024

Annual Outlook Projects Compliance, Due Diligence, Well-Being Will Be Essential to Plan Success in 2025

In 2025, employers are expected to prioritize basic retirement plan administration and management, as highlighted in Hub International Ltd.'s "2025 Retirement & Private Wealth Outlook." The report emphasizes the importance of compliance and due diligence to mitigate risks of litigation, regulatory issues, and cybercrime, which are crucial for the long-term viability of retirement plans. Additionally, plan sponsors are shifting their focus not only on current employees but also on managing the trend of former employees remaining in the plan after leaving or retiring.

Source: Planadviser.com, December 2024

DC Advisers Interested in Retirement Income Solutions, but Still Hesitant

A recent report by Escalent Inc. highlights the growing trend among retirement plan advisers to recommend retirement income solutions. As of September, 30% of defined contribution plan advisers surveyed indicated they are currently recommending such solutions, a rise from 26% in 2023 and 21% in 2022. This percentage is expected to increase, with 40% planning to suggest these solutions in the future. Among the various options, systematic withdrawals are the most popular, with 40% of advisers endorsing them for providing a regular paycheck in retirement. Other recommended solutions include income-producing bond funds (33%), target-date funds that incorporate guaranteed income (33%), managed accounts with annuities (24%), out-of-plan annuities (22%), and in-plan immediate annuities (20%).

Source: Planadviser.com, December 2024

401k Plans: Industry Data Show Low Participant Use of Crypto Assets Although DOL's Data Limitations Persist

In 2022, U.S. retirement savings in 401k plans exceeded $6.7 trillion, and some investment firms began offering crypto asset options for participants, prompting regulatory and industry discussions. The Government Accountability Office was tasked with reviewing these crypto asset options within 401k plans. This report focuses on four key areas: 1. The availability of crypto asset investment options in 401k plans. 2. The potential impact of these assets on participant savings. 3. How fiduciaries comply with ERISA responsibilities when including crypto assets in plans. 4. The level of federal oversight regarding these investment options.

Source: Gao.gov, December 2024

Debt is Limiting American Retirement Savings

According to the 2024 Annual Retirement Study conducted by Allianz Life Insurance Company, a significant number of Americans are prioritizing debt repayment as they strive to secure their long-term financial goals. Notably, 55% of respondents are actively working to pay off debts, with Generation X leading this effort—64% of Gen Xers are focusing on debt reduction compared to 54% of both millennials and boomers. The article notes further that many Americans acknowledge that their debt is a barrier to retirement savings. Among those who wish they had saved more, 46% cite non-housing debts, such as car loans, credit cards, and student loans, as impediments to saving.

Source: Allianzlife.com, December 2024

Spending Retirement Savings is Keeping Americans Up at Night

According to the Alliance for Lifetime Income's 2024 Protected Retirement Income and Planning Study, nearly 46% of American retirees experience anxiety over spending their savings, and 32% are depleting their funds faster than expected. The study, which surveyed 2,516 individuals aged 45-75, identifies inflation (82%) and healthcare costs (70%) as primary concerns affecting retirees' spending and saving. Many retirees lack a clear strategy for withdrawing savings or generating income in retirement, with only 32% having a specific income plan.

Source: Prnewswire.com, November 2024

Advisor Insights: Navigating Retirement Income

In recent discussions, industry stakeholders have reached a consensus on the critical need to empower retirees with the ability to spend confidently. The focus has now shifted from merely identifying the challenges to actively exploring and implementing effective solutions. To gain insights into this topic, the author engaged with experts Jennifer Doss (National Practice Leader at Captrust), Kathleen Kelly (Managing Partner at Compass Financial Partners, a Marsh & McLennan Agency LLC Company), and Michael Kozemchack (Managing Director, Institutional Investment Consulting). They shared their perspectives on retirement income and the ongoing conversations they are having with plan sponsors to enhance the financial security of retirees.

Source: Blackrock.com, November 2024

Securing Retirement: 2025 Trends in DC Retirement Income Solutions

The executive director of the IRIC outlines expectations for defined contribution plans in 2025, emphasizing their evolution due to demographic changes, technological progress, and regulatory adjustments. With uncertainties surrounding Social Security, longer life expectancies, and the decline of traditional defined benefit plans, generating retirement income from DC plans is increasingly important for policymakers, employers, and participants. Key trends anticipated for 2025 will significantly influence retirement income strategies for millions of Americans.

Source: Plansponsor.com, November 2024

Principal's Houston Says Recordkeepers Must Go Beyond Scale, Innovate to Expand Service

At the PLANADVISER 360 conference in Scottsdale, Arizona, Dan Houston, chairman and CEO of Principal Financial Group, highlighted the significance of scale in the ongoing consolidation of recordkeeping companies. He emphasized that innovation and enhanced participant services will be crucial for sustained growth, as advisers leverage these advancements. Houston anticipates further acquisitions and consolidation among recordkeepers but believes that future success will demand greater customization for advisers and plan sponsors to better address participants' needs.

Source: Planadviser.com, November 2024

How to Establish Better Decumulation Options for Future DC Plans

During a session at PLANADVISER 360 in Scottsdale, Arizona, leaders from TIAA discussed the growing demand for lifetime income solutions in retirement plans and the shifting attitudes of plan sponsors. Tim Pitney, TIAA’s head of lifetime income default sales, emphasized that the retirement industry should prepare for innovation even without immediate regulatory changes. He highlighted that, historically, government support like the Pension Protection Act has driven advancements such as the rise of target-date funds, but many current challenges can be addressed without new regulations.

Source: Planadviser.com, November 2024

2024 Defined Contribution Consultant Study

T. Rowe Price's fourth annual Defined Contribution Consultant Study gathered insights from the defined contribution consultant and advisor community regarding current retirement perspectives. The study, conducted from January 12 to March 4, 2024, involved 35 leading consultant and advisor firms, which together manage over $7.5 trillion in assets. Key findings continued to highlight areas such as target date solutions, retirement income, investment trends, and financial wellness programs. New topics introduced this year included managed accounts, alternative investments, and comparisons of active versus passive management strategies.

Source: Troweprice.com, November 2024

One in Three Guilty of Overspending in Retirement: EBRI

A recent study by the Employee Benefits Research Institute reveals that 31% of retirees in 2024 are spending more than they can afford, a significant increase from 17% in 2020. The survey, conducted in the summer of 2024 and involving around 3,600 retirees aged 62 to 75, indicates a rising trend in unaffordable spending among retirees: 27% reported the same in 2022. Additionally, the study found that half of the respondents saved less than necessary for retirement, while one-third felt they saved the right amount, and 17% believed they saved more than needed.

Source: 401kspecialistmag.com, November 2024

Plan Design, Flexibility Outpace Employer Contributions Among Plan Sponsors' Priorities

A new survey by Willis Towers Watson reveals that plan sponsors are increasingly focused on improving the overall financial well-being of employees beyond just enhancing retirement benefits and 401k matching contributions. The 2024 WTW U.S. DC Survey, which involved 483 U.S.-defined contribution plan sponsors, found that only 12% plan to increase their contributions over the next two years. The median employer contribution currently stands at approximately 7.1% of pay, reflecting a decline from 11.4% in 2000, 9.5% in 2010, and 7.4% in 2020.

Source: Plansponsor.com, November 2024

Difficult Work Pushes More Blacks into Early Retirement

The article explores the factors leading to early retirement among Black workers. It highlights how challenging working conditions, including physically demanding jobs, workplace discrimination, and health disparities, contribute to a higher propensity for early retirement in this demographic. Overall, the article underscores the need to understand the specific challenges faced by Black workers in the retirement landscape.

Source: Bc.edu, November 2024

Americans Lack Plans for Retirement Income

According to the 2024 Annual Retirement Study by Allianz Life Insurance Company, many Americans are unprepared for retirement income planning. Less than half (44%) have a strategy for accessing their retirement savings, with Baby Boomers (67%) more likely to have a plan compared to Gen Xers (30%) and millennials (33%). Kelly LaVigne from Allianz Life emphasized that understanding how to withdraw from retirement assets is crucial for readiness. Additionally, nearly half of respondents (48%) expressed concerns about living too frugally and not fully enjoying their retirement.

Source: Allianzlife.com, October 2024

24 Facts That Illuminate Women's Precarious Retirement Prospects

The article highlights 24 facts that underscore the challenges women face regarding retirement security. It discusses issues such as gender pay gaps, longer life expectancies, and caregiving responsibilities, which contribute to women's precarious financial situations in retirement. Key data points illustrate disparities in savings, income, and pension access. The findings aim to raise awareness about the unique hurdles women encounter and advocate for policy changes to improve their retirement prospects.

Source: Prnewswire.com, October 2024

Plan Sponsors Show Rising Interest for Consultancy Services

Morgan Stanley's 2024 Retirement Plan Survey, which included nearly 200 plan sponsors with 401k plans worth at least $50 million, reveals a trend among employers to collaborate with plan consultants to enhance retirement benefits. Over 80% of respondents are currently working with a plan consultant, and there's an increase in the adoption of 3(38) relationships. Although 3(21) partnerships still dominate (55% vs. 27%), the gap is narrowing, with 48% of plan sponsors showing interest in partnering with a 3(38) investment manager.