Coronavirus, SECURE Act key topics at P&I's DC East conference
Skip to main content
pilogo-NEW
Subscribe
  • Subscribe
  • My Account
  • login
  • NEWS
    • Asset owners and the coronavirus
    • Alternatives
    • Consultants
    • Coronavirus
    • Defined Contribution
    • ESG
    • Frontlines
    • Hedge Funds
    • Investing / Portfolio Strategies
    • Money Management
    • Pension Funds
    • People Moves
    • Private Equity
    • Real Estate
    • Searches & Hires News
    • SECURE Act
    • Special Reports
    • WorldPensionSummit
    • Ron Schmitz
      Pandemic drives faster transition for Virginia to private markets
      Mubadala Investment Co. logo
      Mubadala draws on portfolio in coronavirus fight
      T.J. Carlson
      Texas Muni reduces downside risk during pandemic, finding opportunities now
      Scott Davis
      ‘Triage plan’ at Indiana system helped stem losses
    • Some alternative strategies struggle in first quarter following tough 2020
      Close up of Business people shaking hands, finishing up meeting, business etiquette, congratulation, merger and acquisition concept
      Cathay Innovation Partners takes minority stake in Seaya Ventures
      IACPM: Credit managers see stabilizing effect from stimulus programs
      KKR lifts out 3 to focus on clean energy infrastructure
    • Hub International continues buying spree with IBG acquisition
      Callan brings on 2 executives
      Hub International agrees to buy Plan Sponsor Consultants
      Aon names public markets solution leader
    • IACPM: Credit managers see stabilizing effect from stimulus programs
      BofA: Most managers bullish on economy, markets
      Alternative investment funds faced liquidity squeezes in COVID-19 crisis and 2019
      Jerome Powell, chairman of the Federal Reserve, listens during a Senate Banking Committee hearing in Washington on Dec. 1, 2020
      Fed saw some time before taper conditions met – minutes
    • Pentegra launches pooled employer plan
      Teresa Hassara
      Ascensus taps MassMutual alum as new FuturePlan president
      Economic Group Pension Services scoops up third-party administrator
      OregonSaves gathers $100 million in assets
    • WTW to cut carbon footprint of OCIO portfolios by half by 2030
      SEC Commissioners Testify Before The House Financial Services Committee
      SEC shouldn’t require ESG metrics – commissioner
      Tracker gives investors insight into progress on social commitments
      Shoppers wear protective masks while visiting an Apple Inc. store at George Street in Sydney, Australia, on June 24, 2020.
      Apple backs SEC mandate on climate disclosure
    • New book culls institutional wisdom from podcast series
      Fearless Girl
      SSGA’s Fearless Girl statue now shattering glass ceiling
      Tangen video
      Norges chief dons chef’s hat to boost employees’ spirits
      Ken Griffin
      Ken Griffin donates $5 million to give Miami students internet
    • Karen Karniol-Tambour
      Bridgewater appoints 2 co-CIOs to oversee new sustainable investing group
      Hedge funds post best first-quarter return since 2000
      Jason Kephart
      Managers see good times ahead in 2021
      Jev Mehmet, CEO of Brevan Howard's Coremont unit
      Brevan Howard runs $50 billion unit like BlackRock’s Aladdin
    • State Street launches ESG cash reinvestment strategy
      Virginia earmarks $1 billion for 4 managers
      WTW to cut carbon footprint of OCIO portfolios by half by 2030
    • Susan Ford
      Duff & Phelps brings on institutional business development managing director
      A pedestrian holding a cellphone walks past BlackRock Inc. headquarters in New York
      BlackRock AUM hits record $9 trillion in first quarter
      SSGA selects head of continental Europe for global institutional group
      BofA: Most managers bullish on economy, markets
    • A bank customer takes Danish Kroner banknotes from an ATM in Aarhus, Denmark
      Denmark’s PFA Pension achieves 6.3% return in first quarter
      Ontario Municipal promotes from within for new global equities exec
      Kansas City Employees adopts global strategy with small-cap swing
      Michael C. Viteri
      Arizona appoints new CIO
    • Susan Ford
      Duff & Phelps brings on institutional business development managing director
      Paul Morrissey
      Blackstone Growth picks managing director to lead European investing
      Karen Karniol-Tambour
      Bridgewater appoints 2 co-CIOs to oversee new sustainable investing group
      SSGA selects head of continental Europe for global institutional group
    • Paul Morrissey
      Blackstone Growth picks managing director to lead European investing
      Bills of euro, dollar and pound currencies, among others
      Ardian closes latest buyout fund at $8.8 billion
      Hand typing on stationary iPhone at an office reception desk
      Private equity’s taste for tech spurs $80 billion deal spree
      Vista Equity promotes 2 to leadership roles on 2 funds
    • CalSTRS indutrial property
      Investors hungry for industrial properties
      Tim Wang
      GLP names co-president of logistics, industrial real estate for China
      Frank Forster
      StepStone Real Estate adds managing director for Europe
      Christine Iacoucci
      BentallGreenOak promotes from within to fill Canadian CIO role
    • Andy Schreiner
      New PEPs targeting firms without retirement plans
      Jackie Walorski
      Contribution catch-up for caregivers gaining favor
      Retirement cartoon
      Hopes rising for retirement readiness in 2021
      Neal and Brady
      Retirement security could be only issue both sides accept
    • Corporate pension contributions
      Eddy Awards 2021
      COVID-19: One year in
      Charging Bull, sometimes referred to as the Wall Street Bull or the Bowling Green Bull, a bronze sculpture that stands on Broadway just north of Bowling Green in the Financial District of New York City
      Top-performing managers Q4 2020
    • U.S. still a key market for investors
      Collected coverage of P&I's 2020 WorldPensionSummit
      Pedestrians pass a large advertisement on the Arndale Center shopping mall reading 'Act now to avoid a local lockdown' in Manchester, England
      COVID-19 puts new opportunities and risks on the agenda - WPS panelists
      Screens display stock price information over the trading floor of the NYSE Euronext exchange in Paris
      Private assets will continue to grow in portfolios – WPS panelists
  • Data
    • Research Center
    • Searches & Hires Database
    • Searches & Hires News
    • RFPs
    • Charts / Infographics
    • Sponsored Research
    • Trackers
    • Q2 2020 searches and hires overview report
      Q2 2020 money manager M&A activity summary
      Q2 2020 legal overview report
      Q1 2020 searches and hires overview report
    • Virginia earmarks $1 billion for 4 managers
      San Francisco keeps Callan as deferred compensation plan consultant
      Kern County sticks with hedge fund consultant, commits $30 million
      Connecticut earmarks $200 million to 4 alts funds
    • Virginia earmarks $1 billion for 4 managers
      San Francisco keeps Callan as deferred compensation plan consultant
      Kern County sticks with hedge fund consultant, commits $30 million
      Connecticut earmarks $200 million to 4 alts funds
    • Passive Investment Management Services
      Active Extended Global Credit Manager Search
      Actuarial Services
      Investment Management Services
    • Managed account adoption stalls in 2020
      U.S. bonds have worst quarterly return since 1981
      Stable value retains edge over money market funds
      Taiwan Semiconductor’s No. 1 in the emerging markets book
    • Institutional Investors: Shared Expectations, Divergent Paths
      Global Investor Study 2016
      Workplace Financial Wellness
    • U.S. Endowment Returns Tracker
      Pension Fund Returns Tracker
      Earnings Tracker
      Corporate Pension Contribution Tracker
  • Insights
    • Opinion
    • White Papers
    • Industry Voices
    • Letters to the Editor
    • Partner Content
    • Publisher's Update
    • CalPERS cartoon
      Urgency underscores CalPERS' search for a CIO
      Multiemployer plans cartoon
      Money — but no fixes — for multiemployer plans
      Vaccination cartoon
      Rallying to meet the ongoing COVID-19 challenge
      Tesla cartoon
      Don’t confuse wealth creation with retirement saving
    • Bipsync Client Stories: RMS in Action at Pensions and Superannuation Funds
      COVID-19 Makes LP Portfolio Management More Important Than Ever
      China: the outlook is bright for longer-term investors
      Finding Differentiation in Securitized Assets
    • Jake Remley
      Commentary: Inflation expectations vs. reality in the bond market
      Greg Shea and Steven Kindred
      Commentary: The solution for yield-seeking allocators may be hiding in plain sight
      Jim Park
      Commentary: Asian Americans, Pacific Islanders face ‘bamboo ceiling’ in money management
      Jared Gross
      Commentary: Anchors and allocations – breaking the grip of 60/40
    • Writer using a typewriter
      OCIO industry needs to adopt GIPS
      Writer or journalist workplace. stock illustration
      Even as it assails China, Trump administration emulates it
      Skeptical of Main Street support for proxy adviser proposal
      Focus on manager diversity pushes asset owners’ to walk the talk
    • P&I Content Solutions
      Research for Institutional Money Management
      P&I Content Solutions
      Top questions for institutional investors
      Sponsored Content By Newton Investment Management
      Growth and Innovation in Emerging Markets
      P&I Content Solutions
      In Challenging Markets, Systematic Global Macro Strategies Could Hold Opportunity
    • Help us help you by supporting quality journalism
      You Must Believe in Spring
      Everything Must Change
      Tomatoes & Investments
  • Multimedia
    • Videos
    • Webinars
    • Polls
    • Slideshows
    • Charts / Infographics
    • watch video
      1:23
      The passive fixed-income glut
      watch video
      1:38
      Is it time for DC plans to embrace private equity?
      watch video
      5:39
      The coronavirus pandemic: One year later
      watch video
      0:45
      Private funds weathered 2020 turmoil
    • New Outlook on Income: A Framework for Evaluating DC Retirement Income Solutions
      Understanding the PEP Evolution
      Divest or engage?
      Innovations in DC: Helping supercharge retirement outcomes
    • POLL: The Biden infrastructure plan
      POLL: Retirement income solutions
      POLL: Working after the pandemic
      POLL: The year ahead for the 1,000 largest U.S. retirement funds
    • view gallery
      9 photos
      Coronavirus and the markets
      view gallery
      22 photos
      The 1,000 largest retirement funds: 2020
      view gallery
      10 photos
      Outlook 2020
      view gallery
      10 photos
      2019 as seen through the eyes of Roger
    • Managed account adoption stalls in 2020
      U.S. bonds have worst quarterly return since 1981
  • Events
    • Conferences
    • Webinars
    • DC Investment Lineup Virtual Series
      ESG Investing Virtual Series
      Private Markets Virtual Series
    • New Outlook on Income: A Framework for Evaluating DC Retirement Income Solutions
      Understanding the PEP Evolution
      Divest or engage?
      Innovations in DC: Helping supercharge retirement outcomes
  • Careers
  • Research Center
MENU
Breadcrumb
  1. Home
  2. DEFINED CONTRIBUTION
March 12, 2020 03:30 PM

Coronavirus, SECURE Act key topics at P&I's DC East conference

Margarida Correia
Robert Steyer
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print
    Bloomberg
    Preston Rutledge

    Financial security dominated discussions at the recent Pensions & Investments East Coast Defined Contribution Conference as speakers said the SECURE Act can make DC participants' retirement more secure while COVID-19 will make it less secure.

    The advance in security will take time to achieve because the Department of Labor will write a series of regulations covering such areas as in-plan annuities, pooled employer plans and disclosure statements for participants, said Preston Rutledge, the agency's assistant secretary for the Employee Benefits Security Administration, during a keynote speech Monday.

    The challenge to security, however, may happen uncomfortably quickly because the coronavirus outbreak has substantially increased the risk of recession, said Megan Greene, a Harvard University economist, at the conference held March 8-10 in Orlando, Fla. She delivered her remarks two days before the Dow Jones Industrial Average dropped into bear market territory — falling 20% below its February high.

    If the global supply shortage caused by the virus leads to companies failing, it could lead to a "demand shock," exacerbating the financial turmoil roiling the markets, Ms. Green said Monday in a keynote speech.

    Already there are indications that the "supply shock" is turning into a global demand shock, she said. One is that inflation expectations have dropped sharply over the past month.

    "Rate cuts aren't that effective in the face of this kind of shock," said Ms. Greene, noting that the Federal Reserve and central banks worldwide are limited in what they can do. "No one has that much room to cut rates."

    Fiscal policy, rather than monetary policy, can play a much bigger role, but "politicians have to agree on what measures to implement," she said. Any fiscal stimulus will need to be carefully tailored to make sure it goes to businesses that need credit and workers who are losing their jobs, she added.

    The heightened risk of recession, however, doesn't mean retirement savers "need to liquidate and get out of the market," she said. Instead they need to "invest defensively" in industries such as utilities and health care, Ms. Greene said.

    Safe harbor

    Mr. Rutledge delivered his comments via video because the coronavirus outbreak prompted the federal government to restrict most employee travel.

    "Although the law contains no specific regulatory direction to EBSA, we expect some stakeholders may request some regulations or guidance," said Mr. Rutledge, referring to the law's annuity safe harbor provisions. He didn't identify any examples that might require rules or guidance nor did he provide a timetable. The law took effect Jan. 1.

    He expressed a greater urgency for regulations affecting pooled employer plans. "We believe there are important rules that need to be issued this year to facilitate establishments of the new pooled employer plans," he said.

    Although the SECURE Act requires registration of these new plans with the Labor Department, it doesn't require guidance on prohibited transactions, he said. "It does seem to us that some prohibited transactions will be helpful," he said.

    "We have held stakeholder meetings on this subject," said Mr. Rutledge, adding that he encouraged attendees at the DC conference to send in suggestions for these plans and other SECURE Act issues.

    The pooled employer plans offer the opportunity to "lower administrative burdens on employers and increase the scale of plans," he said. Hopefully, he said, the plans can lead to more people being covered, better investment returns and lower fees.

    The annuity safe harbor provisions of the SECURE Act are important to EBSA as the emphasis on retirement saving moves to defined contribution plans from defined benefit plans, he said.

    "Employees are not only increasingly responsible for the adequacy of their savings at the time of retirement but also for insuring that their savings last through their retirement years and, in many cases, the remaining lifetimes of their spouses and dependents," he said.

    The SECURE Act safe harbor provisions offer greater protection to sponsors in choosing an insurer to guarantee an in-plan annuity. The law provides, among other things, the recognition that sponsors don't have to choose the lowest cost product. They are allowed to conclude that an insurer is financially capable of meeting its obligations by requiring the insurer to provide specific written affirmation.

    The SECURE Act gives the Labor Department "clear direction" in its efforts to enhance retirement security opportunities for DC participants, he added.

    ‘Safer safe harbor'

    The annuity provisions in the SECURE Act establish a "safer safe harbor" for sponsors, said Marla J. Kreindler, a partner at Morgan Lewis & Bockius LLP, Chicago. Although the law protects fiduciaries from liability for participant losses, fiduciaries still must review the benefits and costs of annuity products, she said during a panel discussion titled, "Can You Insure Your Income?"

    The annuity provisions in the SECURE Act are a "big deal" that clears a path for greater use of in-plan annuities and development of new annuity products, said Kevin Walsh, a principal at Groom Law Group, Washington, during a panel discussion called, "What Plan Sponsors Need To Know About The SECURE Act."

    He also suggested that the law could provide a "small step" for companies to develop other new products for defined contribution plans, most notably non-liquid alternative investments.

    Mr. Walsh said the law's provision for allowing portability of an in-plan annuity from one plan to another could also increase sponsors' willingness to offer these options. The law addressed a concern of sponsors and participants who have worried about in-plan annuities that couldn't be transferred if a participant moved to another employer with a different record-keeping platform or if the sponsor chose a new record keeper.

    The portability and annuity provisions of the SECURE Act were hailed by Daniel Notto, managing director and ERISA strategist at J.P. Morgan Asset Management, New York, who said that "it's going to take a while for the plan sponsor community to digest this."

    It's possible some employers that now offer DC plans might decide to join a pooled employer plan as a way to cut retirement costs, he said "This isn't just for start-ups."

    Cybersecurity

    Among the other features at the DC East Conference was a discussion of cybersecurity. An informal poll of attendees showed that 25% of their employers had experienced a data breach, and 45% had been hit by an unauthorized withdrawal.

    Plan sponsors need to investigate every step of the distribution process to protect participants against cyberfraud, said Margaret Haering, counsel to Connecticut's office of the state comptroller.

    "People who are attacking your plans are relentless and you need to be relentless, too," she said during a panel discussion, "Protecting Retirement Plans Against Cybersecurity Risk."

    Ms. Haering advised plan sponsors to look at what types of authentication are required and the "most likely parts where somebody could create an account takeover."

    Connecticut suffered a cyberbreach in 2016 when several participants in the state's defined contribution plans had money taken from their accounts. "We were able to stop the activity, but we learned some very hard lessons," Ms. Haering said.

    Other panelists agreed that everyone has a role to play in guarding against cybercriminals. "When we onboard a new hire, we talk to them about the importance of protecting this data," said Nick Nyhus, vice president in human resources and information technology for the University of Minnesota Physician's defined contribution plan. "There isn't one person who is totally responsible. We all are."

    Sean McCloskey, branch chief in the Department of Homeland Security's national protection and programs directorate office of cyber security & communications, agreed, saying that cybersecurity was once considered an IT problem. "It's not an IT problem anymore. This is an organizational issue. We all have a role in cybersecurity."

    Keep ‘em laughing

    Humor is one of the best ways to engage participants, many speakers said at the conference.

    When talking about retirement, most employees "glaze over" unless they're over 50, said William Caldwell, manager of benefits and compensation at Metropolitan Washington Airports Authority, during a panel on financial wellness solutions.

    To overcome this communications challenge, Mr. Caldwell often uses humor and funny videos to grab employees' attention, or as he put it "get the hook into them." For example, when he asked employees if they would like a new Toyota during recent talk on financial wellness, he pulled out little toy Yodas from "Star Wars," a move that got people to laugh — and listen, he said.

    Personalized messages and simplified language were other tools plan sponsors employed to drive engagement and boost retirement savings. Too often, plan sponsors communicate their plans to the entire workforce not "appreciating that the level of understanding is very different across employees," said Michael Bourcier, corporate benefits director of financial wellness at Lockheed Martin Corp.

    To address this issue, Lockheed Martin now provides participants with personalized financial wellness statements, Mr. Bourcier said during a panel on removing roadblocks in retirement savings. The statement is helpful, he said, because it "speaks in very easy terms."

    Related Articles
    COVID-19 uncertainty disturbs DC participants
    Asset owners, managers turn to technology to combat COVID-19
    SECURE Act’s annuity provisions to get Labor Department input
    Commentary: Don’t be insecure about the SECURE Act
    Recommended for You
    Pentegra launches pooled employer plan
    Pentegra launches pooled employer plan
    Ascensus taps MassMutual alum as new FuturePlan president
    Ascensus taps MassMutual alum as new FuturePlan president
    Economic Group Pension Services scoops up third-party administrator
    Economic Group Pension Services scoops up third-party administrator
    Top questions for institutional investors
    Sponsored Content: Top questions for institutional investors
    sponsored
    Events
     
     
    Sponsored
    White Papers
    Bipsync Client Stories: RMS in Action at Pensions and Superannuation Funds
    COVID-19 Makes LP Portfolio Management More Important Than Ever
    China: the outlook is bright for longer-term investors
    Finding Differentiation in Securitized Assets
    Green and sustainable bonds in emerging markets
    Portfolio Protection: One Size Fits None
    View More
    Sponsored Content
    Partner Content
    The Industrialization of ESG Investment
    For institutional investors, ETFs can make meeting liquidity needs easier
    Gold: the most effective commodity investment
    2021 Investment Outlook | Investing Beyond the Pandemic: A Reset for Portfolios
    Ten ways retirement plan professionals add value to plan sponsors
    Gold: an efficient hedge
    View More
    E-MAIL NEWSLETTERS

    Sign up and get the best of News delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    Subscribe Today
    April 5, 2021 Page One

    Get access to the news, research and analysis of events affecting the retirement and institutional money management businesses from a worldwide network of reporters and editors.

    Subscribe
    Connect With Us
    • RSS
    • Twitter
    • Facebook
    • LinkedIn

    Our Mission

    To consistently deliver news, research and analysis to the executives who manage the flow of funds in the institutional investment market.

    pilogo-NEW
    About Us

    Main Office
    685 Third Avenue
    Tenth Floor
    New York, NY 10017-4036

    Chicago Office
    150 N. Michigan Ave.
    Chicago, IL 60601

    Contact Us

    Careers at Crain

    About Pensions & Investments

     

    Advertising
    • Media Kit
    • P&I Content Solutions
    • P&I Careers | Post a Job
    • Reprints & Permissions
    Resources
    • Subscribe
    • Newsletters
    • FAQ
    • P&I Research Center
    • Site map
    • Staff Directory
    Legal
    • Privacy Policy
    • Terms and Conditions
    • Privacy Request
    Pensions & Investments
    Copyright © 1996-2021. Crain Communications, Inc. All Rights Reserved.
    • NEWS
      • Asset owners and the coronavirus
      • Alternatives
      • Consultants
      • Coronavirus
      • Defined Contribution
      • ESG
      • Frontlines
      • Hedge Funds
      • Investing / Portfolio Strategies
      • Money Management
      • Pension Funds
      • People Moves
      • Private Equity
      • Real Estate
      • Searches & Hires News
      • SECURE Act
      • Special Reports
      • WorldPensionSummit
    • Data
      • Research Center
      • Searches & Hires Database
      • Searches & Hires News
      • RFPs
      • Charts / Infographics
      • Sponsored Research
      • Trackers
    • Insights
      • Opinion
      • White Papers
      • Industry Voices
      • Letters to the Editor
      • Partner Content
      • Publisher's Update
    • Multimedia
      • Videos
      • Webinars
      • Polls
      • Slideshows
      • Charts / Infographics
    • Events
      • Conferences
      • Webinars
    • Careers
    • Research Center