401(k) Roundtable

This week we try something a little different. This episode is the audio portion of a webinar I hosted a few weeks ago. The content was great and I thought it would make sense share with you. My conversation features Sam Henson and Ethan McWilliams, both members of Lockton's ERISA regulatory and compliance team and both spent time as investigators with the Department of Labor. We start with a quick overview of an employer's fiduciary responsibilities, then compare and contrast how they relate to retirement and benefits plans, next we hit on the DOL's enforcement priorities, the every popular topic of HSA plans and where they fit in the fiduciary conversation, plan assets and fees and close out with everyone's favorite topic compliance and reporting.

I host several webinars are year, if you did not get an invite to this one and would like to in the future, just go to www.401kfridays.com/subscribe today and join our email list. Next one is coming up in November and will feature a prior podcast guest as we talk about how a plaintiff's attorney views your retirement plan.

Guest Bios

Sam Henson serves as Director, Legislative & Regulatory Affairs for Lockton Retirement Services. He acts as a subject matter expert on ERISA compliance, DOL/IRS activities, and the legislative landscape. In addition, Sam supervises compliance services for more than 1,000 Lockton retirement clients and 100 retirement Associates.

Prior to joining Lockton, Sam spent almost 10 years with the U.S. Department of Labor's Employee Benefits Security Administration. While with the DOL, Sam was a Senior Investigator, conducting more than 100 civil and criminal investigations of employee benefits plans, service providers, and fiduciaries. Sam supervised enforcement efforts for benefit plans funded by prevailing wage laws under the Service Contract Act and Davis-Bacon Act. In his current role, Sam is able to leverage his past experiences to assist employers with reducing their fiduciary risks.

Ethan McWilliams brings five years of ERISA regulatory compliance experience to his position as Lockton Benefit Group's Senior Compliance Analyst. At Lockton, Ethan's primary responsibility is heading up the newly launched simulated Department of Labor investigation service, ACE.

Working with client or prospect representatives and Lockton's account teams, Ethan simulates every step of the DOL investigation process with the ultimate goal of preparing plan sponsors for the process of a real DOL investigation. Through a review of plan documents and mock fiduciary interviews, Ethan identifies red-flag items and suggests available remedies, recommends the implementation of best practices where established procedures may be weak, and educates plan sponsors on exactly what to expect when their benefit plans are chosen for investigation.

Before joining Lockton, Ethan worked as an Investigator for the US Department of Labor - Employee Benefits Security Administration (EBSA). At EBSA, Ethan conducted a variety of employee benefit plan investigations on both the retirement and health/ welfare sides, running the gamut from complex defined benefit pension plans and 401(k)/403(b) defined contribution plans to multi-option medical, dental, and life insurance plans. Ethan also served as a member of several regional and national project teams, including initiatives aimed at identifying best practices for plan procedural prudence and establishing baselines for reasonable plan fee calculations.

Struggling with a fiduciary issue, looking for strategies to improve employee retirement outcomes or curious about the impact of current events on your retirement plan? We've had conversations with retirement industry leaders to address these and other relevant topics! You can easily explore over 150 prior on-demand audio interviews here. Don't forget to subscribe as we release a new episode each Friday!

Should employers focus their efforts to help employees on the journey to retirement by providing true investment advice or more in the trenches financial support? To debate the finer points and provide his in the trenches experience, I was excited to welcome back Peter Dunn, aka Pete the Planner to the podcast. Pete has a pretty unique vantage point as he provides employers with a suite of financial wellness tools but he also has a support center for employees of his clients to speak, email or text with. During our conversation, Pete shares some common real life questions and challenges his team gets from real life employees. We hit on why honesty and empathy is important in financial conversations, examples of how investment advice only scratch s the financial surface for most employees, a few thoughts on where plan design fits in the conversation, a few sanity checks for me and strategies to move farther down the path towards providing holistic financial support to help improve employees financial wellbeing. Also, don't miss where I was actually more eloquent in describing something than Pete, defiantly a first for me.

Before we get started, a few of the suggestions I have received to improve the podcast was to share more of my personal opinions. This episodes definitely gets there. If you have further ideas or suggestions to improve the podcast please shoot me an email to [email protected].

Guest Bio

Peter Dunn a.k.a. Pete the Planner® is an award-winning comedian and an award-winning financial mind. He's a USA TODAY columnist and the author of ten books, six of which were featured in a nationwide launch at Barnes & Nobles stores in January of 2015. He is the host of the popular radio show The Pete the Planner Show on 93 WIBC FM and is a columnist for the Indy Star. Pete has appeared regularly on CNN Headline News, Fox News, Fox Business as well as numerous nationally syndicated radio programs. In 2012, Cision named Pete the fourth most influential financial broadcaster in the nation. Pete lives in Carmel, Indiana with his wife and two young children.

Struggling with a fiduciary issue, looking for strategies to improve employee retirement outcomes or curious about the impact of current events on your retirement plan? We've had conversations with retirement industry leaders to address these and other relevant topics! You can easily explore over 150 prior on-demand audio interviews here. Don't forget to subscribe as we release a new episode each Friday!

Wars have been started over words, and retirement outcomes for employees can also be impacted by words. My guest today, Steve Jenks, a Senior Vice President and the Chief Marketing Officer at Empower shares his over 20 years of experience on how word choice can make a big difference to someone's ability to retire. Key words you find commonly in retirement plan communications like match, assets, participants, deferral percentage don't have the meaning or impact you think it should have with your employees. We also hit on the differences in impact of illustrations vs. words, the importance of keeping calls to action simple, how automatic plan features have changed communications, measuring results, social media strategies and much more. Also, he had a surprising conclusion on how employees like to receive information about their retirement plans and their desire for in person meetings, don't miss that.

Steve also references a few white papers from studies he and his team have conducted at Empower. You can find links to those along with his answer to a bonus question, the transcript from the episode and much more at www.401kfridays.com/words.

Guest Bio

Steve Jenks is Senior Vice President and Chief Marketing Officer for Empower Retirement and Great-West Financial®.

​Steve has 28 years of marketing, product and business leadership experience. He joined Empower and Great-West in 2014. Previously, Steve served as Head of Defined Contribution Product and Marketing for Putnam Investments, where he helped shape and execute growth strategies for the organization's defined contribution, investment-only and rollover businesses. Steve began his investment industry career in 1990 with Fifth Third Bank. From there, he held leadership roles in marketing, product, finance and relationship management for Fidelity Investments from 1992 to 2009. Steve also co-founded Acceleration Retirement, a marketing analytics and outsourcing firm, and Stable Two Financial, a registered investment advisory company. He served as CEO of both companies.

Steve holds a bachelor's degree with distinction in business analysis from the Indiana University Kelley School of Business. He is a registered representative of GWFS Equities, Inc. and maintains FINRA Series 6, 26 and 63 securities registrations. Steve is currently on the boards of the American Red Cross, Mile High Chapter; Big Brothers Big Sisters of Colorado; and Court Appointed Special Advocates for Children (CASA) Colorado.

Struggling with a fiduciary issue, looking for strategies to improve employee retirement outcomes or curious about the impact of current events on your retirement plan? We've had conversations with retirement industry leaders to address these and other relevant topics! You can easily explore over 150 prior on-demand audio interviews here. Don't forget to subscribe as we release a new episode each Friday!

Could retirement plan loans be the next big fiduciary concern for plan sponsors? Hard to tell, but my conversation today with Bruce Ashton, ERISA Attorney and Partner in the Employee Benefits and Executive Compensation Practice at Drinker Biddle, will certainly help you understand why multiple regulators are taking a harder look at the retirement plan loans, especially defaults. We cover a ton of ground including my opening question which is likely the first thing that would come to the minds of most employers, we delve into how loans become a fiduciary concern and much more. I also ask Bruce the inevitable question of whether the time has come to eliminate loans in workplace retirement plans.

Before we get started, don't forget that we have bonus question on the website, a full transcript of the episode, a copy of the white paper Bruce authored on the loan challenges we discuss today and much more. You can find it by going to 401kfridays.com/ashton.

Guest Bio

Bruce L. Ashton has more than 35 years of experience handling employee benefits matters. His practice concentrates on representing plan service providers (including RIAs, independent record-keepers, third-party administrators, broker-dealers and insurance companies) in fulfilling their obligations under ERISA. His experience includes representing public and private sector plans and their sponsors, negotiating the resolution of plan qualification issues under IRS remedial correction programs, advising and defending fiduciaries on their obligations and liabilities, and structuring qualified plans, non-qualified deferred compensation arrangements.

Combining his employee benefits and transactional experience, Bruce is also active in the installation and funding of employee stock ownership plans (ESOPs).

Bruce is a contributor to Drinker Biddle's Broker-Dealer Law Blog, which provides practical insights on litigation, regulatory, compliance and fiduciary issues impacting broker-dealers. He has co-authored four books on employee benefits issues and a quarterly column in the Journal of Pension Benefits on IRS remedial programs, and is a frequent contributor to various tax and pension publications. He is a frequent speaker on employee benefits issues ranging from fiduciary responsibility to ESOPs, and is a regularly featured speaker at conferences sponsored by ASPPA, and other organizations.

Struggling with a fiduciary issue, looking for strategies to improve employee retirement outcomes or curious about the impact of current events on your retirement plan? We've had conversations with retirement industry leaders to address these and other relevant topics! You can easily explore over 150 prior on-demand audio interviews here. Don't forget to subscribe as we release a new episode each Friday!

There are three state run retirement plans that are now live. Despite the fact they have been in the news, there are still a lot of questions about what they are, how they work and how they impact employers and employees who already have a 401(k) or other workplace retirement plan. To help provide some information and clear up misperceptions I am excited to have Katie Selenski, the Executive Director of CalSavers, the newly launched California state retirement plan join on the podcast. During our conversation, Katie takes care of the basics and also shares the highlights of some research they did when preparing to launch their plan, some of which might be a bit surprising and other points could help employers with some decisions about their own retirement plans. We also discuss the profile of the businesses that will benefit from state plans, how wage theft laws provide some protection to employees who participate in them, whether there might be a national plan at some point in the future and what's next for state plans.

As we did on last week's episode, Katie answers a written bonus question, we have a full episode transcript, how to get in touch with Katie and more on the website. You can find that by going to www.401kfridays.com/calsavers2019.

Guest Bio

Katie Selenski was appointed in 2017 by the California State Treasurer to serve as the first Executive Director of the California Secure Choice Retirement Savings Investment Board which operates CalSavers, the state's pioneering retirement savings program. The program will provide a path to retirement security for millions Californians who currently lack access to a retirement savings vehicle at work.

Prior to taking the helm at CalSavers, Ms. Selenski was the State Policy Director for pension policy at The Pew Charitable Trusts in Washington, D.C., where she managed Pew's efforts to help fiscally distressed states and cities undertake data-driven pension system improvements. Previously, she was a senior manager with the nonpartisan public sector consulting firm Harvey M. Rose Associates, based in San Francisco, where she advised policymakers on a wide array of budget, management, and policy matters, including pensions. She has also worked as a municipal bond rating analyst, a legislative fellow in the California Assembly, and the director of an historic statewide nonpartisan youth voter turnout initiative. Ms. Selenski is a member of the advisory board of the Aspen Institute's Leadership Forum on Retirement Savings. She is a graduate of the University of Chicago and the John F. Kennedy School of Government at Harvard University.

Struggling with a fiduciary issue, looking for strategies to improve employee retirement outcomes or curious about the impact of current events on your retirement plan? We've had conversations with retirement industry leaders to address these and other relevant topics! You can easily explore over 150 prior on-demand audio interviews here. Don't forget to subscribe as we release a new episode each Friday!

After a quick hiatus in July, we are back and excited about what we have in store! To kick things off, this episode features my conversation with Jeff Holt, CFA and Director, Multi-Asset & Alternative Strategies with Morningstar Research Services and a lead author of the annual Morningstar Target Date Landscape Report. This is the third time Jeff has been on the podcast and his return does not disappoint. The broader theme of our conversation was the importance of avoiding oversimplifications when evaluating target date funds. As you will hear, this ranges from cost, glide path, the classic too vs. through distinction, mutual funds vs. CITs and many more. With the prevalence of target date funds in workplace retirement plans, I thought this would be a great way to get things going again.

Before we get started, a few tweaks to look forward to going forward. First, we will provide a transcript on the 401(k) Fridays website for each episode. Second, also on the website each guest will provide a written answer to a bonus question. For this specific episode, we have a link to the 2019 Target Date Landscape Report we discussed today. You can find all this and more by going to www.401kfridays.com/holt2019. If you have any other ideas to improve the podcast please share them with me via email, [email protected].

Guest Bio

Jeff Holt, CFA, is director of multi-asset and alternative strategies for Morningstar Research Services LLC, a wholly owned subsidiary of Morningstar, Inc. He covers target-date funds and other multi-asset funds from various asset managers.

Before joining Morningstar in 2014, Holt spent nearly nine years at Jeffrey Slocum & Associates (since acquired by Pavilion Financial), where he was responsible for investment research to support the firm's defined-contribution practice. He covered target-date funds, stable value funds, and other asset classes specific to defined-contribution clients.

Holt holds a bachelor's degree in management, with a concentration in corporate finance, from Brigham Young University. He also holds the Chartered Financial Analyst® designation.

Struggling with a fiduciary issue, looking for strategies to improve employee retirement outcomes or curious about the impact of current events on your retirement plan? We've had conversations with retirement industry leaders to address these and other relevant topics! You can easily explore over 150 prior on-demand audio interviews here. Don't forget to subscribe as we release a new episode each Friday!

This episode is a follow on conversation to an episode a few months ago where we talked about the operational aspects of self-directed brokerage accounts in workplace retirement plans. While you don't have to listen to the prior episode first, it is definitely worth checking out if you are interested in the topic. Today, Tom Clark, a Partner and ERISA Attorney with the Wagner Law Group and I jump into the sometimes scary and confusing fiduciary territory of offering self-directed brokerage accounts. Tom shares great input on the general fiduciary concepts around self-directed brokerage, fee equity issues, discrimination issues, prohibited investments, the DOL's attitude towards them and much more. Tom also talks about a few left turns employers can take off a cliff when offering self-directed brokerage accounts, a few great responses to participant questions about self-directed brokerage, thoughts on beanie babies and his take on whether Ralphie will shoot his eye out.

Quick reminder, this will be our last episode prior to a brief hiatus in July. Rest assured we will be back in August with some exciting new episodes. During the break, check out some of the 160 episodes we have released. Most of them are evergreen and do not have an expiration to them. Also, I will be thinking about ways to make the podcast more valuable. Please shoot me any ideas for improvement, future guests, topics or questions I should be asking. Love to hear what you have to say, shoot me an email to [email protected].

Guest Bio

Tom Clark leads the St. Louis office of the Wagner Law Group. His expertise encompasses all aspects of employee benefits programs, including the design, implementation and compliance of retirement plans, health and welfare plans, and executive and incentive compensation arrangements. He also has a robust practice assisting covered service providers in meeting their ERISA compliance needs.

Mr. Clark's vast litigation experience complements the firm's strong and growing ERISA and employment litigation department and includes work on landmark ERISA cases involving complicated ERISA fiduciary duty issues. He has been quoted extensively as an ERISA and employee benefits expert by outlets such as Reuters, the Associated Press, Bloomberg, and Forbes.

Mr. Clark teaches ERISA fiduciary law as an Adjunct Professor at The Washington University in St. Louis School of Law, his alma mater. He is a co-author of the Second Edition of "ERISA: Principles of Employee Benefits Law," the only treatise of its kind that provides an overview of the regulation of employee benefit plans by highlighting the central principles and competing policies of employee benefits law in a compact and accessible format for a broad audience of readers.

Struggling with a fiduciary issue, looking for strategies to improve employee retirement outcomes or curious about the impact of current events on your retirement plan? We've had conversations with retirement industry leaders to address these and other relevant topics! You can easily explore over 150 prior on-demand audio interviews here. Don't forget to subscribe as we release a new episode each Friday!

For the last several years a consistent message in the marketplace for retirement plan sponsors, participants and the industry has been the importance of investment fees. The good news is nearly all investment fees have been on a downward trend. As the cost of many passive investment options approach zero, is expense still the most important factor when evaluating index strategies? Today, I am happy to welcome Marty Kleppe, Head of Index Investing at Vanguard to share his thoughts. With the continued popularity of index funds in retirement plans, Marty shares some timely thoughts about index investing is more than just low cost, what securities lending is and the role it plays and finally how there is skill involved in managing index funds. This was a great conversation and one to definitely stick with to the end as I give Marty the opportunity to respond to some of comments active managers have shared about index managers over the years.

Also, Marty and his team put together a white paper on this topic which you can access from the link in the notes or by searching Vanguard Beyond Expense Ratio.

Guest Bio

Martin Kleppe is the head of Equity Index Product Management in Vanguard Portfolio Review Department, where his team is responsible for conducting surveillance of competitor products and positioning, meeting with clients and prospects to discuss Vanguard's equity index lineup, publishing on noteworthy developments in the equity index marketplace and Vanguard lineup, and supporting equity index education initiatives. Mr. Kleppe joined Vanguard in 1989, and joined Portfolio Review in 2003. For the majority of his tenure with Portfolio Review, Mr. Kleppe was a senior member of the Product Strategy team, which is responsible for researching, designing, and launching new funds; monitoring the health of the existing fund lineup; researching, proposing, and implementing changes to the existing fund lineup; and coordinating these functions across five global jurisdictions. In 2016, Mr. Kleppe became the Global SMA Product Manager. His responsibilities included researching and defining the investment capabilities available to SMA (separately managed account) clients and overseeing the various organizational processes needed to support SMAs. He assumed his current role in 2017, and continues to work with SMAs. Mr. Kleppe earned a B.S. from The Pennsylvania State University and an M.B.A. Saint Joseph's University. In addition, he is a CFA® charterholder and is a member of the CFA Society of Philadelphia.

CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute.

Struggling with a fiduciary issue, looking for strategies to improve employee retirement outcomes or curious about the impact of current events on your retirement plan? We've had conversations with retirement industry leaders to address these and other relevant topics! You can easily explore over 150 prior on-demand audio interviews here. Don't forget to subscribe as we release a new episode each Friday!

One of the most popular questions we get from employers is what is going on with 401(k) or ERISA litigation, or the close cousin to the question, what is on the horizon that we should be aware of? To share some perspective on that and much more, I am happy to welcome Carl Engstrom, a partner with Nichols Kaster, a plaintiff's litigation firm who has secured over $100 million in ERISA settlements in the last few years. During our conversation, Carl does a great job sorting through some headlines and predictions that he agrees with and some that he does not agree with on the future direction of ERISA litigation. As you will hear, Carl is not shy and shares his candid insights and predictions so I won't steal his thunder.

One thing before we get started, our podcast community continues to grow. Thank you for sharing the podcast with friends, colleagues or members of your professional network. As our audience continues to grow, it helps me attract great guests to share helpful insights with you!

Guest Bio

Carl F. Engstrom is a partner at Nichols Kaster, PLLP, a plaintiff's litigation firm located in Minneapolis, Minnesota. As a founding member of Nichols Kaster's ERISA litigation group, Carl has been counsel of record in every ERISA case brought by the group since its inception in 2015. In that time, Nichols Kaster's ERISA litigation group has helped negotiate settlements totaling over $100 million on behalf of defined contribution plan participants harmed by fiduciary self-dealing, excessive fees, and imprudent retirement plan investments. Notable settlements include cases against Deutsche Bank, American Airlines, Allianz Asset Management of America, Fujitsu, and BB&T.

Prior to entering the legal profession, Carl spent six years working as a financial advisor, providing retirement and investment advice to hundreds of clients, and earning the Certified Financial Planner™ designation, though he has not maintained his certification.

Carl graduated magna cum laude from the University of Minnesota Law School and earned his undergraduate degree from Harvard College, where he also graduated with honors.

Struggling with a fiduciary issue, looking for strategies to improve employee retirement outcomes or curious about the impact of current events on your retirement plan? We've had conversations with retirement industry leaders to address these and other relevant topics! You can easily explore over 150 prior on-demand audio interviews here. Don't forget to subscribe as we release a new episode each Friday!

Student loans have gotten a lot of attention recently. Whether it is due to the sheer number of loans and size of the outstanding debt, or due to the competition for talent, employers are weighing whether they should offer new benefit to help those who have them. Today, we take a little different view on student loan debt and delve into the impact they might have on the economy and unpack a few popular narratives in the marketplace. To provide the intellectual muscle to the conversation I was glad to have Scott Kimball, a portfolio manager for BMO Global Asset Management join me today. Scott does a great job helping explain the impact of student loan debt on the economy and creates the case for why employers should consider their impact on the employees, even if you don't have a lot of millennials. Also, don't miss his take on whether Student Loans are the next sub prime mortgages and stick around for Scott's thoughts on some other things he is concerned about that could pose a threat to the economy.

Before we get started, we have a few more new episodes coming out in June before we take a little hiatus in July. During the short break, I will be thinking about ways to improve the podcast, kicking around future topics and looking for future guests. I would love to get feedback from our listeners. Please shoot me an email to [email protected] if you have something to share. Anything good, bad or just a note saying that you enjoy the show is appreciated.

Guest Bio

Scott Kimball, CFA Director & Portfolio Manager is responsible for the firm's investment policy and strategy and manages client portfolios. He joined BMO in 2007 and served as a research analyst prior to joining the portfolio management team in 2011. He is also a member of the management committee.

Previously, Scott held positions at Merrill Lynch and other boutique investment firms. He began his career in the investment industry in 2003.

Scott holds an M.B.A. from the University of Miami and a B.A. in international business from Stetson University. In addition, he is a CFA® charterholder.

Struggling with a fiduciary issue, looking for strategies to improve employee retirement outcomes or curious about the impact of current events on your retirement plan? We've had conversations with retirement industry leaders to address these and other relevant topics! You can easily explore over 150 prior on-demand audio interviews here. Don't forget to subscribe as we release a new episode each Friday!