There are two parts of the SECURE Act that I believe will have the greatest impact on plan sponsors and service providers.
- The first part includes the provisions on retirement income, including the safe harbor for selecting a guaranteed income provider, the ability to distribute guaranteed income investments if a plan no longer want to offer those products, and a new requirement to give participants projection of their retirement income.
- The second impactful part is the authorization of Open MEPs (Multiple Employer Plans), which the law calls “PEPs” (or Pooled Employer Plans). That change will allow plans that can be adopted by multiple unrelated employers, transferring much of the fiduciary responsibility onto the sponsor of the PEP, which could be, g., a financial institution, a recordkeeper or an advisory firm.
This article discusses the fiduciary safe harbor for selecting the provider (e.g., insurance company) for a guaranteed retirement income product. The other provisions will be discussed in future articles.
