PLANSPONSOR - November - December 2023 - 15

says. " You can balance that by just incorporating
some of these asset classes, which
at standalone might be more expensive,
into a diversified portfolio. "
Further, to counteract arguments
illiquidity, Stempien
about
the assets'
says, there are now vehicles in many of
these asset classes that are valued daily
and provide daily liquidity.
Menus to Reflect Diverse Needs
Carl Gagnon, assistant vice president of
global financial well-being and retirement
programs at insurance company
Unum, finds that, when people reach
their 50s and 60s, if they have not saved
enough, they try to compensate by being
more aggressive with their investments.
" I think people are trying to continue
to gain that return on their investments,
especially if they have other resources, "
Gagnon says.
Unum works with Fidelity Executive
Services, which helps provide a variety of
401(k) investments from which participants
may pick and choose, Gagnon says.
In addition, Unum launched a
partnership several years ago with the
financial wellness platform Brightside,
which provides a one-on-one financial
concierge service for employees. Gagnon
says the service is available to employees
who need advice about their finances and
drawing down their assets in retirement,
as well as about other immediate financial
stressors.
" Providing the resources necessary
is important, so as people transition to
different stages in their lives, including
decumulation, they have some guidance
[and can] go to somebody from a company,
or a sponsor, they've trusted, versus going
into the jungle of the retail environment,
where they may not have that ERISA
[Employee Retirement Income Security
Act] oversight and fiduciary protections, "
Gagnon says.
Michael Doshier, a senior defined
contribution strategist at T. Rowe Price,
says if participants have done a good
job saving before retirement, they tend
ASK THE EXPERTS
How Are Small-Plan ParticipantCounting
Rules Changing?
QUESTION: I've always been frustrated that our fairly small ERISA [Employee
Retirement Income Security Act] 403(b) plan has been subject to an expensive
annual financial audit, as we have only a relatively few active employees
(about 50) with an account balance in the plan. Most of our employees do not
participate, as they are low-paid, despite our extensive efforts to encourage
them to, and we can't afford automatic enrollment. We can't exclude these
employees from participation due to the universal availability requirement
for 403(b) plans. However, I heard from our recordkeeper that there may be
some relief from the Department of Labor going forward. Is that true?
ANSWER: Yes. On February 23, the DOL announced changes to the annual Form
5500. These changes will be effective beginning with the 2023 plan year, filed in 2024.
Among the changes is one to the participant counting methodology: Instead of
all individuals with an account balance plus all eligible employees without one being
counted, only individuals with an account balance, as of the beginning of the plan year,
will be counted. This will lower the participant count for many plans, particularly for
403(b) plans, where there are often a large number of employees who are eligible due to
the universal availability rules, but have no account balance.
Please note, however, that though you have only about 50 active employees with
an account balance, you may still have more than the 100-participant threshold above
which a plan audit is generally required, since you must count terminated and retired
employees, as well as beneficiaries of deceased employees, who have an account balance.
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 does not constitute legal advice and cannot be used or
substituted for legal or tax advice. Forward your questions for the experts to Amy
.Resnick@issmediasolutions.com, with " Ask the Experts " as the subject.
to " take risk off the table appropriately.
If you haven't done such a good job
saving, you need to continue to have that
growth, " he says.
He
argues that the
value
created
by higher-growth-oriented portfolios
usually " far outweighs short-term market
volatility. "
Managed Accounts
Stempien points out that managed accounts
have become a more attractive option for
plan sponsors as pricing has come down,
and the accounts are now more competitive
with TDFs, to which plans typically default.
Managed accounts can be another
vehicle in which to incorporate nontraditional
asset classes.
" These portfolios are built for individuals
in an institutional type of offering
where you're getting solutions cheaper
than you often could, and it's put into a
portfolio to manage risk, " Stempien says.
The main differentiator between
a managed account and a target-date
offering, according to Stempien, is the
added level of customization.
-Remy Samuels
PLANSPONSOR.COM November - December 2023 15
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PLANSPONSOR - November - December 2023

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