It’s been… quite a year. An expert panel at an Oct. 26 session of ASPPA All Access discussed what the developments this year have meant for retirement plan professionals, as well as participants.
The panel featured Robert Kaplan, Director of Technical Education for the American Retirement Association; Thomas Finnegan, President, Actuarial Division, CBIZ Retirement Plan Services; JJ McKinney, Principal Consultant, McKinney Consulting; Missy Matrangola, President, Atlantic Pension Services, Inc.; and Rod Stortenbecker, Assistant Vice President of Compliance, Lincoln Financial Group.
In the Wake of the CARES Act Enactment
The Setting Every Community Up for Retirement Enhancement (SECURE) Act was enacted on Dec. 20. And just three months later—March 27—another major piece of legislation, the Coronavirus, Aid, Relief and Economic Security (CARES) Act, was enacted as the pandemic quickly worsened. But not only the situation that sparked its enactment posed challenges—so did the measure itself and the changes it made, which directly affect plans, service providers and participants.
“We had been focused on the SECURE Act,” said McKinney, noting that “The situation was different from the expectations we had earlier in the year.” Stortenbecker indicated just how different: “On March 27, we were inundated with questions. It was a big challenge just getting information out,” he said. Matrangola had a similar experience, remarking that their office encountered a lack of awareness about required minimum distributions and the ability to roll them back in.
“It was a real fire drill right after the CARES Act passed,” said Finnegan. Stortenbecker had a similar experience, remarking, “The call center took a number of participant calls about distributions. We saw that a lot of them wanted discussions.” Their offices moved quickly to better serve clients. Finnegan said that they gathered as much information for the client base as possible. Said Stortenbecker, “We used it as an opportunity to speak to clients and for relationship building,” he added that they “tried to be as flexible as possible.”
But the enactment of the CARES Act was not the end—more laws were enacted, and regulations to implement them came from federal agencies in rapid fire. “The government just never quit giving,” said Matrangola. The onslaught did not mean inundating clients, however; remarked Matrangola, “Clients only want to know what they absolutely need to know.” Stortenbecker expressed a similar view, and said that his office “moved from a fire hose approach to the sprinkler approach.” McKinney said that their operation took a pause after the initial period and formed a team that puts information together in digestible amounts.
Plan activity did not spell trends as negative as some expected. McKinney said they had expected distributions to increase, but they “didn’t see a huge uptick.” Stortenbecker said they expected more plan freezes and match reductions than what actually happened; McKinney reported his office “did see a lot of match reductions and freezes,” but that some freezes were done preemptively, and the plans were unfrozen later. Finnegan reported reduced activity, saying, “With companies not wanting to spend money to protect liquidity, employers have been on hold.”
Challenges in the Office
Addressing clients’ needs was challenging enough, but it was by no means the extent of what they faced: there also were challenges in the office itself. The immediate reaction was “we’re going to work from home. We’re going to do what we have to, to get through this. But we were never set up to have everyone work from home at the same time,” said Finnegan. Matrangola made the same observation: “We were not set up for all working at home.”
And it went deeper than mechanics and business operations; the new way offices suddenly functioned also affected how new and younger employees learned and became a part of operations. Finnegan remarked that one of the problems with the virtual way of working is that younger workers are not seeing how more experienced workers handle situations. “The real-life experiences of how to be a senior-level consultant is what they’re missing out on,” he said, adding that people just out of college gain from seeing how more experienced people handle things. “We should be teachers and we need a lot of patience. And it’s harder in this environment,” said Kaplan.
But that can also spell opportunity, McKinney indicated. “We have a real opportunity here for a ride-along, he said—for example, having new staff members join a a phone call. “It is more acceptable now than before,” McKinney said, noting that “we can use these opportunities to beef up that training.”
Lessons and Suggestions
Panelists indicated that they and their operations had learned much and had some suggestions regarding how service can be further refined.
“We learned how resilient we can be,” said McKinney. Finnegan had a similar observation, remarking that they were pleasantly surprised by staff engagement and their spirit of cooperation. “It shows, when they are committed, what people can accomplish,” he said.
“The one word I would use is ‘adapt,’” said Kaplan. “It is important to let individual clients know “we are here with you,” Finnegan asserted.
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