PLANSPONSOR - July - August 2023 - 11

planning one-on-one meetings or group
sessions, or encouraging employees who
want to bring a trusted third party such
as a family member or even a human
resources representative with them to
meetings to do so, for what she calls twoon-one
meetings, McCosley says.
She says just asking, " 'Do you need
additional resources or time?' " can give
them " the opportunity to speak up. There's
less of a stigma to it. "
Building optimum flexibility into a
retirement plan can also help neurodivergent
workers. One pattern Yoder has seen
among clients with autism or ADHD is a
fragmented work history, and some diagnoses
can necessitate frequent medical
appointments or even leaves of absence.
" We're talking about possible gaps
in employment or experiencing microaggressions
at work, " which a flexible plan
can make room for, she says.
Yoder
also
encourages
frequent
and direct communication highlighting
what is available. Some employees may
benefit from the greater capacity to
create in-plan and sidecar emergency
savings accounts, as permitted under
the Setting Every Community Up for
Retirement Enhancement 2.0 Act of
2022. Also, ABLE [Achieving a Better
Life Experience]accounts, which
let
people with disabilities save earnings
via direct deposit, can also help if their
employer makes no contributions to a
defined contribution plan or annuity.
One goal should be to remind
employees that they have resources-e.g.,
their 401(k)-if an emergency such as an
expensive medical need arises, Yoder says.
In Pacilio's experience,
the best
time to help employees understand their
options is when they start their job. Having
solid procedures in place will aid in this, as
will, after introducing the benefits, giving
the workers " plenty of time to make decisions
that best suit their needs. "
By measuring participation rates
and click-through rates of company
emails, the best options will become
clear, Harper says. -Elizabeth Harris
TIDBITS
Risk Transfer Sales Skyrocket
Total U.S. single premium pension risk transfer
sales were $6.3 billion in the first quarter of
2023, up 19% from Q1 2022. The total was the
highest first-quarter mark on record.
The buy-out sales of $6.3 billion were 138%
higher than the dollar amount sold in Q1 2022,
and LIMRA reported that there were 116 buy-out
contracts sold in Q1, up 55% from Q1 2022.
Source: LIMRA, U.S. Group Annuity Risk Transfer Sales Survey
PLANSPONSOR.COM July - August 2023 11
ASK THE EXPERTS
When Must a New Plan Meet
SECURE 2.0 Mandates?
QUESTION: We're a nonprofit organization planning to establish a 401(k)
plan for a new for-profit subsidiary member of our controlled group. Does
that plan need to include the automatic enrollment provision mandated
for new plans under SECURE 2.0? We have more than 10 employees, but
the new subsidiary would have only about five at inception.
ANSWER: Section 101 of the SECURE [Setting Every Community Up for Retirement
Enhancement] 2.0 Act of 2022 requires employers establishing a 401(k) or 403(b) plan
to include auto-enrollment with a default rate of 3% through 10%, a 90-day " unwind "
feature whereby a participant may, for 90 days after auto-enrollment, call back deferred
earnings as a permissible withdrawal, and automatic escalation of 1% per year, up to 10%
through 15%. These requirements apply beginning January 1, 2025, for plans established
on and after December 29, 2022. Generally, employees may opt out.
There are exceptions to the requirements, including when the business or organization
maintaining the plan has existed for less than three years or normally employs 10 or
fewer workers. The applicability of this provision centers in large part on the identity of
the employer " maintaining " the plan. We anticipate that guidance will address this issue
before the 2025 implementation date.
Kimberly Boberg, Taylor Costanzo, Kelly Geloneck and David Levine, with Groom
Law Group, and Michael A. Webb, senior financial adviser at CAPTRUST, answer
readers' questions. This is general information, does not constitute legal advice and
cannot be used or substituted for legal or tax advice. Have a question for the Experts?
Email Amy.Resnick@issmediasolutions.com with Ask the Experts as the subject.

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