Understanding the tax code is one thing. Translating it into a compliant, well-run retirement plan, and doing so consistently, is another challenge entirely.
CYCLE 4 RESTATEMENTS ARE COMING: Key Dates, Changes, and Action Steps
BROADENING CENTERS OF INFLUENCE: A Strategic Growth Path for TPAs
TED BENNA’S LATEST BIG IDEA
October 18–21, 2026
San Antonio, TX
22|BEYOND THE BUZZWORDS: EVALUATING 3(16) AND 402(A) FIDUCIARY SERVICES
3(16) and 402(a) services can provide meaningful value when they solve genuine governance, accountability, or resource challenges.
By Shannon Edwards, Chad Johansen, and Rickie Taylor
26|OUT OF THE ORDINARY: THE RETIREMENT PLANS YOU DIDN’T LEARN ABOUT IN ASPPA EXAM PREP
A guided tour through the plan designs that keep TPAs on their toes.
By
Kirsten Curry, Lauren Strobel, and Lynn Young
30|RETIREMENT PLANS: A LEGISLATIVE CORNUCOPIA
An expansive historical look at the regulations that have shaped retirement policy and plans as we know them today.
By John Iekel
08|FROM THE PRESIDENT New ASPPA Tools, Initiatives, and What Comes Next By
Shannon Edwards
11|NEWLY AND RECENTLY CREDENTIALED MEMBERS
56|INSIDE ASPPA
Coming Soon to ARA: ‘Ask ERISA’ Will Tackle Complex Retirement Plan Questions By
Robert Richter
06|LETTER FROM THE EDITOR Train Kept a Rollin’ By
John Sullivan
10|REGULATORY / LEGISLATIVE UPDATE Why ARA Supports the Proposed ‘Investment Selection Rule’ By
Brian H. Graff
ARTICLES
14|ACTUARIAL / DB U.S. Pension Funding: Findings from Milliman’s Latest Annual Studies By Ryan Cook, Tim Connor, Rick Gordon
18|REGULATORY Cycle 4 Restatements Are Coming: Key Dates, Changes, and Action Step By Susan Poliquin
20|COMPLIANCE Virtual Training Best Practices By Jenn Taylor
38|RECORDKEEPING
When Employees Can’t Understand Their Benefits: Why Multilingual Communication Matters By Michael Kirschman
42|STATE-RUN PLANS A Potpourri of State Retirement Plan Coverage By John Iekel
54|SUCCESS STORIES When Plan Design Goes Wrong, and VCP Gets it Right By Shannon Edwards and Theresa Conti
46|MARKETING
Broadening Centers of Influence: A Strategic Growth Path for TPAs By Katie Boyer-Maloy
48|TECHNOLOGY
SOC 2 and Cybersecurity: A Modern Playbook for Onboarding a New Tech Firm By Cam Sechrist
52|WORKING WITH PLAN SPONSORS
How to Address Retirement Plan ‘Gaps’ By Ted Benna
DECEMBER 7—8, 2026
Ted Benna is Co-Creator of Radish Plan. In 1980, Ted Benna discovered a provision in the IRS tax code that would become the 401(k) — the most widely used retirement savings vehicle in American history. More than 70 million Americans now use plans built on his innovation.
Katie Boyer-Maloy is Director, TPA Distribution with Retirement & Income Solutions | at Principal Financial Group.
Theresa Conti, QKA, APR, ERPA, CBFA has been involved in the retirement plan industry for more than 35 years, she started her firm Sunwest Pensions in 1998 and sold it to July Business Services in 2023.
Ryan J. Cook, FSA, EA, MAAA is a consulting actuary in the Boise office of Milliman with more than 10 years of experience advising plan sponsors on their retirement programs. Ryan has expertise in the valuation and projection of pension and OPEB plan liabilities as well as the areas of asset-liability modeling, plan design, and risk management. He is an author of Milliman’s annual Corporate Pension Funding Study.
Tim Connor, FSA, EA, MAAA is a principal and consulting actuary in the Little Falls, NJ office of Milliman. He has over 25 years of experience focused primarily on multiemployer defined benefit plans and is an author of Milliman’s biannual Multiemployer Pension Funding Study.
Shannon M. Edwards, ERPA, QPA, QKC, QKA, is the President of TriStar Pension Consulting. She is a member of the ASPPA Leadership Council and the Plan Consultant Committee.
Rick Gordon, FSA, EA, MAAA is a principal and consulting actuary in the Philadelphia office of Milliman. He has over 25 years of experience in pensions and employee benefits consulting with clients in both public and private sectors, and is an author of Milliman’s Public Pension Funding Study.
John Iekel is a writer with the American Society of Pension Professionals and Actuaries (ASPPA).
Michael Kirschman is CEO of Plan Member. With over 25 years of collective experience in the retirement plan industry, the Plan Member team is committed to assisting retirement plans in managing communications, boosting engagement, locating missing participants, and ensuring compliance.
Susan Poliquin is a Licensed CPA and the Director of Document Services for Definiti.
Cameron Sechrist Head of Engineering at Stax. ai. He is an entrepreneur and marketer who works with other entrepreneurs, students, and businesses to build new, innovative project, and market existing ones.
Jenn Taylor, QKA, QKC, TGPC, is a Senior Account Manager at Corebridge Financial. She also serves on the Women In Retirement Third Thursday and ASPPA Focus Committees.
Plan Consultant is Published by
EDITOR IN CHIEF
Brian H. Graff, Esq., APM
PLAN CONSULTANT COMMITTEE
Mary Patch, QKA, CPFA, Co-chair; David J. Witz, Co-chair; Lee Bachu; Gary D. Blachman; Katie Boyer-Maloy; Jason D. Brown; Linda Chadbourne, QKA; Theresa Conti; Megan Crawford; Shannon Edwards, ERPA; John A. Feldt, CPC, QPA; Amy Garman; Emily Halbach; Tiffany Hanks; John Iekel; Travis Jack; Chad Johansen; Olivia Schwartz; Kerry Smith; Rickie Taylor; Colleen Windham; Manny Marques; Heidi Salati
EDITOR
John Sullivan jsullivan@usaretirement.org
SENIOR WRITERS
Ted Godbout, John Iekel
ADVERTISING SALES
Tashawna Rodwell trodwell@usaretirement.org
TECHNICAL REVIEW BOARD
Rose Bethel-Chacko, CPC, QPA, QKA; Marianna Christofil; Michael CohenGreenberg ; Sheri Fitts; Drew Forgrave, MSPA; Grant Halvorsen, CPC, QPA, QKA; Jennifer Lancelot, CPC, QPA, QKA; Robert Richter, APM
COVER Apisit Suwannaka / Shutterstock.com
2026 ASPPA OFFICERS
PRESIDENT
Shannon M. Edwards, ERPA, QPA, QKC, QKA
PRESIDENT-ELECT
Manny Marques, CPC. QPA, QPFC, AIF®
VICE PRESIDENT
Genelle Brakefield, QKA, TGPC
IMMEDIATE PAST PRESIDENT
JJ McKinney IV, CPC, QPA, QKA
Plan Consultant is published quarterly by the American Society of Pension Professionals & Actuaries, 4401 N. Fairfax Dr., Ste 600, Arlington, VA 22203. For subscription information, advertising, and customer service contact ASPPA at the address above or 800.308.6714, customerservice@USAretirement.org. Copyright 2026. All rights reserved. This magazine may not be reproduced in whole or in part without written permission of the publisher. Opinions expressed in signed articles are those of the authors and do not necessarily reflect the official policy of ASPPA.
The president’s executive order is the latest step in the federal government’s bipartisan efforts to increase retirement plan coverage and savings for private-sector workers. By John Sullivan
Bill Clinton, whom even critics called the “perfect politician,” had a knack for taking ideas from the opposition and making them his own once he realized how popular they were with voters.
The president signed an executive order (EO) late in April to “expand access to high-quality retirement savings accounts for millions of Americans.”
Beginning in January, individuals will be able to access TrumpIRA.gov, a new Federal platform “designed to connect American workers who do not have access to employersponsored retirement plans with high-quality, low-cost IRAs offered by private-sector financial institutions.”
Referencing his State of the Union speech earlier this year, he said the executive order (EO) would make Thrift Savings Plan-style savings accounts currently available to Federal workers available to all Americans and ensure those accounts will accept the highly anticipated Saver’s Match.
More specifically, the EO directs Treasury Secretary Scott Bessent to ensure that “workers who contribute to qualifying IRAs and meet the requisite requirements” receive a Saver’s Match contribution, in which the government will contribute up to $1,000 a year to eligible lower- and middle-income workers who contribute to the accounts.
Notice it’s described as a platform, not a program, so it acts more like an exchange. But at the EO’s signing ceremony, Trump teased next steps that would need Congressional approval, so more is certainly on the way.
Calling out Trump’s Clintonesque pivot, Ways and Means Committee
Ranking Member Richard E. Neal (D-Mass.) reminded the public whose idea it was first.
“Millions of American workers still lack the benefit of employer-sponsored retirement plans to get a fair shot at a retirement,” Neal wrote. “As Chairman of the Ways and Means Committee, I wrote and guided SECURE 2.0 into law, making saving easier, and now, that legacy is driving today’s executive order. Because of our Saver’s Match, lowand moderate-income Americans will have the opportunity to receive up to $1,000 in matching contributions from the federal government.”
In fortuitous timing, Spencer Look, Jack VanDerhei, and the team at Morningstar Retirement dropped Access, Auto-Enrollment, and Accumulation: A Simulation of Universal Retirement Plan Coverage, the same day that Trump announced the EO.
Simulating the impact of automatically enrolling workers who lack access to a defined-contribution plan at work or a state auto-IRA into a federal retirement plan, the report incorporated “real-world behaviors,” such as opt-outs, preretirement withdrawals, and cashouts.
In addition, they tested the incremental impact of two potential Saver’s Match “enhancements.”
The first restricts access to match funds until age 62, addressing the concern that workers may withdraw match funds before retirement, “Look and VanDerhei wrote. “The second expands eligibility such that workers with a modified adjusted gross income of up to $50,000 (single) and $100,000 (joint) would be eligible for the full match and would double the match rate to 100% from 50%.”
The results?
They estimated that approximately 32.3 million workers participate in a federal autoenrollment plan, after accounting for opt-outs.
“Over a 10-year horizon, the proposal would add between $635 billion and $983 billion in wealth to the system under our base scenarios, rising to between $981 billion and $1.35 trillion when combined with an enhanced Saver’s Match,” they noted.
Auto-enrollment at a 6% default savings rate produced the largest aggregate average increase in retirement wealth at 49%. However, auto-enrollment at 3% with escalation to 6% yielded a 44%, suggesting what they called “a reasonable middle ground.”
We’ll emphasize that the president’s executive order DID NOT mention automatic enrollment, and Morningstar’s report on a universal retirement plan program’s impact was hypothetical, but momentum for regulation and legislation to close the retirement savings coverage gap is building and has been for some time.
“ARA has long supported efforts to expand retirement plan coverage and increase savings, particularly for workers who have historically been left behind,” said Brian Graff, CEO of the American Retirement Association. “We stand ready to work with policymakers to ensure that any new initiatives are designed to complement the existing system, preserve choice, and provide fair and meaningful incentives for all savers.” PC
John Sullivan Editor-in-Chief
There is so much to look forward to, and I believe that is worth celebrating. By Shannon Edwards
I can hardly believe summer is already here and that the year is moving as quickly as it is. What stands out to me most right now, though, is not just how fast the calendar is moving, but how much progress is taking shape across ASPPA and the ARA. We see ideas turn into tools, initiatives turn into action, and important conversations turn into opportunities to make a real difference.
One example I am especially excited about is Ask ERISA, a new AI tool being built on one of the most trusted resources in our industry: the ERISA Outline Book. For retirement plan professionals, the Outline Book has long been the place we turn for reliable answers to ERISA-related questions. It has been the industry’s premier research tool. While Ask ERISA will not replace the value of a knowledgeable consultant, it will make finding answers to some compliance questions even easier by helping users find them more quickly and efficiently.
What makes this so exciting is not just the technology itself, but the source behind it. Because the tool is being built from the ERISA Outline Book, rather than the open internet, users can have greater confidence in the information they receive. That kind of practical, trustworthy innovation is exactly what our members need as our work becomes more complex and the pace of change continues to accelerate.
I also want to highlight an initiative that reflects why the work we do matters so much. This July, we will mark the first annual Women’s Retirement Security Day, which will be observed each year on the second Tuesday of July. This is something the ARA Council for Women has worked hard to establish, and I believe it has the potential to make a real impact.
This day was created because the retirement savings gap for women is both significant and persistent. Women’s median 401(k) account balance is 65% lower than men’s, and women’s annual contributions are 43% lower.
Those numbers are driven by a range of systemic and situational factors, including the gender pay gap, longer life expectancy, time away from the workforce for parenting and caregiving, limited or inconsistent access to employer-sponsored plans, competing short-term financial priorities, and lower confidence in long-term financial decisionmaking. Women’s Retirement Security Day gives all of us an opportunity to raise awareness, support education, and help move the conversation forward.
There is a website with ideas for how to participate through educational briefings, virtual events, and local community events, and I encourage you to get involved. Follow this link to find out more and get involved https://www.usaretirement.org/ get-involved/wir/womens-retirement-security-day/.
Looking ahead, please also mark your calendars for the ARA Women in Retirement Leadership Forum, January 6 - 8, 2027, in Phoenix, Arizona. The committee is already hard at work putting together the agenda, and I have no doubt it will once again be an outstanding event. It is always a valuable opportunity to sharpen leadership skills, share ideas, and connect with women across the retirement plan services industry. Registration will open soon, and I hope you will plan now to join us in Phoenix.
You may remember that I shared earlier this year that ASPPA is developing the Qualified Pooled Plan Professional (QP3) designation to meet the growing needs of
the PEP and MEP marketplace. That work continues to move forward, and I am excited about what it will mean for professionals serving this evolving segment of our industry.
And, of course, I hope you are making plans for ASPPA Annual in San Antonio.
We will be celebrating ASPPA’s 60th anniversary this year. The TPA Growth Summit will be held on Sunday, October 18, and ASPPA Annual will open with our first general session that afternoon. The conference will continue through noon on Wednesday, October 21, and the program is packed with amazing content. It is always time well spent, and I know attendees will leave with insights they can put to work immediately.
There is so much to look forward to, and I believe that is worth celebrating. We have strong programs, important new initiatives, and practical tools that help our members serve clients well and strengthen the retirement system. Thank you for all you do and for the many ways you continue to move this profession forward. PC
Join the QKA® Class of 2026 this Fall
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Process, not politics, should guide 401(k) investments. By providing vital asset-neutral, process-driven clarity to 401(k) investment selection, the proposed rule will help America’s retirement plan system remain strong and durable. By Brian H. Graff
There is no shortage of attention surrounding the Department of Labor’s new rule on Fiduciary Duties in Selecting Designated Investment Alternatives.
Much of the early coverage has focused on whether the rule will open 401(k) plans to “risky” private-market investments. But that is not what this rule does; I believe it’s important to clarify what it actually does, and why the American Retirement Association (ARA) supports it on behalf of its members and the investing public.
ERISA — the federal law governing workplace retirement plans — already permits private market investments.
Defined benefit pension plans, many of them maintained by unions for their members, have successfully used private market investments for decades. Even some larger 401(k) plans already use private-market investments as part of a managed portfolio that serves as a target-date fund for participants.
What the rule actually does is reinforce the strict ERISA fiduciary process — a framework that has long governed how retirement plan investment decisions are made and, importantly, one designed to protect participants.
It does this by giving plan sponsors and their independent fiduciary advisors valuable clarity about the decision-making process. The rule offers long-needed practical guidance on how these fiduciaries should approach investment selection, benchmarking, and ongoing monitoring.
And, importantly, it does this in an entirely asset-neutral manner, applying to all 401(k) investments equally. It does not require, favor, or suggest any particular asset class, including private markets. In fact, DOL’s proposed rule could just as easily apply to so-called “ESG investments” that were the subject of a regulation issued during the Biden Administration.
Put simply: this rule is not about expanding access to any particular investment. Rather, it reinforces the protective standards that govern how plan fiduciaries make decisions by providing a roadmap for investment selection, not a mandate.
Plan fiduciaries still must act solely in the interests of participants and beneficiaries, follow a prudent, well-documented process, and continually monitor investment decisions over time.
Further, nothing in this rule shields private market investments from potential liability. If a retirement plan sponsor and their independent fiduciary advisors fail to satisfy ERISA’s strict fiduciary standard, they could still be subject to a participant class-action lawsuit. This is why no retirement plan fiduciaries are going to be haphazardly adding any new investment options into their plans.
So why is this rule so important?
Because it provides plan sponsors and their independent fiduciary advisors with the guidance they have been seeking to assist them in fulfilling their fiduciary responsibilities.
For those responsible for building and overseeing 401(k) investment lineups — plan sponsors and their fiduciary advisors — this clarity is not academic. It has real-world implications. Many younger 401(k) participants today will have retirement dates in 2050 or later.
Relying exclusively on an increasingly shrinking public market with performance heavily reliant on the “Magnificent 8” is likely not a sensibly prudent investment strategy over a 30-year time horizon. In such cases, some exposure to properly vetted private market investments may make perfect sense.
Today and in the future, plan fiduciaries will need to navigate an ever-expanding array of investment products and strategies. The rule offers a durable roadmap, guiding decision-makers through these choices with clearer expectations.
In doing so, it provides greater confidence in decision-making and reinforces participant protections
CPC™
Victoria Kennedy
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Nolan Beiter
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Jill Casey
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Amy Crews
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Melanie Bateman
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Michael Kurland
Stephen Martin
Adam Meeker
Tamara Ogg
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Elena Sanjarova
James Schauer
Valerie Sinicrope
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Salauddin Akbar
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“AS THE DEBATE OVER THIS RULE UNFOLDS, WE HOPE SENSIBLE POLICY, NOT POLITICS, DRIVES THE EVALUATION PROCESS. ALL SHOULD AGREE THAT KEEPING POLITICS OUT OF 401(K) INVESTMENT DECISIONS WOULD CLEARLY BE IN PARTICIPANTS’ BEST INTERESTS.”
by making the fiduciary process more explicit. It allows fiduciaries to evaluate investments thoughtfully, without guessing regulatory intent or overcorrecting out of caution. And it supports innovation without compromising participants’ financial interests.
The ERISA framework allows fiduciaries to exercise judgment, but it also requires that judgment to be
grounded in a prudent process that puts participants first.
By providing vital asset-neutral, process-driven clarity to 401(k) investment selection, the proposed rule will help America’s retirement plan system remain strong and durable.
As the debate over this rule unfolds, we hope sensible policy, not politics, drives the evaluation process. All should agree that keeping politics out of 401(k) investment decisions would clearly be in participants’ best interests.
We encourage members to review the proposal and consider how the guidance may impact their current fiduciary processes and investment practices.
ARA will continue to provide updates, analysis, and opportunities for member engagement as the process moves forward. PC
Virtual • May 13-14, 2026
By Ryan Cook, Tim Connor, Rick Gordon
Each year, Milliman publishes comprehensive studies analyzing the funded status of U.S. defined benefit (DB) pension plans across three primary sectors: multiemployer plans, corporate plans, and public plans.
These studies provide a consistent perspective on the financial health and evolving challenges of the nation’s retirement systems. This article summarizes the 2025 findings and draws comparisons across the sectors, highlighting the trends and drivers that shaped results over the past year.
DB plans fall into three main categories, each serving a distinct group of participants and operating under unique regulatory frameworks.
Multiemployer plans are collectively bargained arrangements typically covering unionized workers from multiple employers within the same industry, such as construction or trucking.
Corporate plans are sponsored by individual privatesector companies and generally provide retirement benefits to their own employees.
Public plans are established by state and local governments to offer retirement security to public employees, including teachers, police officers, and other civil servants. The funding policies, regulatory oversight, and demographic profiles of these plans differ significantly, shaping both their challenges and strategies for long-term sustainability.
In 2025, U.S. multiemployer DB plans continued a period of notable financial improvement. According to the Milliman Multiemployer Pension Funding Study, the aggregate funded percentage for all multiemployer plans reached 103% as of December 31, 2025, up from 97% at the end of 2024. The aggregate funded percentage has improved 50 percentage points since the 2008 global financial crisis and sits at its highest level in Milliman’s nearly 20-year study period.
Strong investment returns were a major factor in the improvement during 2025. Milliman’s assumed portfolio for the study returned 13.9% for the year, based on a
multiemployer plan’s typical portfolio holdings of 49% equity, 28% fixed income, and 23% alternatives. This significantly exceeded most plans’ assumed rate of return, which is typically between 6.0% and 8.0% per year, with the average in the study being around 6.8%.
The strong investment returns in 2025 continued a general trend of favorable performance over the last decade, with the Milliman assumed portfolio earning a compounded annual return of 8.2% since 2015. In addition, annual employer contributions have consistently exceeded combined benefit accrual and administrative costs over the past decade, helping to fuel the recovery.
The Special Financial Assistance (SFA) program, which was established under the American Rescue Plan Act of 2021 to provide federal assistance to financially distressed plans, is winding down. By year-end 2025, 146 plans had received nearly $75 billion in SFA. Without SFA, the aggregate funded ratio would have been 94% rather than 103%.
As of December 31, 2025, 90% of plans were 80% funded or better, and 69% of plans were 100% funded or more. Although the funded position has improved to its highest level, meaningful risks remain, such as those related to economic volatility and growing plan maturity.
Milliman’s multiemployer study reports on funded percentages, where liabilities are developed using each plan’s assumed rate of return on assets as the discount rate. Other methods of measuring liabilities and funded status may produce different results. The average discount rate utilized in each of the three categories discussed in this article (multiemployer, corporate, and public) is summarized in the following paragraphs and contrasted in Figure 1.
U.S. corporate pension plans continued to strengthen their financial position in 2025. The Milliman Corporate Pension Funding Study, which analyzes the 100 U.S. public companies with the largest DB plan assets, found the aggregate funded ratio increased to 103.8% at fiscal year-end 2025, up from
101.1% at fiscal year-end 2024. This marks the second consecutive year of surplus funding, and the highest funded status observed for these plans since 2007.
The improvement was driven primarily by strong asset performance. The average investment return across the plans studied was 8.8% for fiscal year 2025 (for most plans, fiscal year 2025 coincided with calendar year 2025), outpacing the average expected return assumption of 6.6%.
These returns more than offset upward pressure on liabilities caused by a decrease in the average discount rate from 5.39% to 5.31% over the fiscal year. Employer contributions increased slightly to $17.9 billion but remain well below the levels sustained throughout the decade following the 2008 financial crisis.
Risk management remains a central focus for corporate plan sponsors. Many continue to implement liability-driven investment (LDI) strategies and pursue pension risk transfer
(PRT) transactions, such as annuity purchases and lumpsum windows. However, in 2025, PRT activity among the companies in the study decreased to $12.6 billion compared to $23.4 billion last year. This may be due to the higher funded ratios opening additional risk management options.
A decades-long trend has seen corporate plans shift asset allocations toward fixed income investments. At the end of 2025, the average allocation among these plans was 53% fixed income, 24% equities, and 23% other assets.
This shift is influenced by regulatory and accounting standards that require liability valuations and minimum funding calculations for corporate plans to be based on high-quality bond yields. Aligning assets with liabilities through fixed-income investment helps sponsors manage funded status volatility and reduce the risk of unexpected contribution requirements.
With surplus funding now widespread and most plans frozen, surplus management is becoming increasingly
Note that measurement dates vary slightly between the studies and the different metrics. See the corresponding funding study for more details.
important. Current law only permits sponsors to use excess assets for limited purposes (e.g., offsetting future pension costs if a company chooses to re-open its pension plan).
Potential legislative changes could further expand permissible uses for surplus assets, but in the meantime, sponsors remain focused on protecting funded status gains and evaluating the timing and structure of further de-risking moves.
Public pension plans also recorded improvement in funded status during 2025, though their aggregate funding remains below that of the corporate and multiemployer sectors. According to the Milliman Public Pension Funding Study, the aggregate funded ratio for the 100 largest U.S. public pension plans is estimated at 84.7% as of November 30, 2025, up from 81.7% at November 30, 2024.
For context, the aggregate asset return for the 100 public plans for the 2025 calendar year was 12.4%, a notable investment gain compared to the median funding interest rate assumption of 7.0%. Note that, as with multiemployer plans, public plans use funding interest rates based on each plan’s assumed rate of return on assets.
Asset allocation strategies among public plans differ from those in the corporate and multiemployer sectors. As of the latest data, the average allocation was approximately 41% equities, 22% fixed income, 4% cash, and 33% alternatives — including real estate, private equity, and hedge funds.
This represents a lower allocation to fixed income and higher allocations to alternatives than in corporate or multiemployer plans. Although alternatives can offer diversification, they also introduce additional volatility and complexity.
As with their private-sector counterparts, public pension plans contend with ongoing cash-flow challenges as benefit payments outpace annual contributions, making strong investment performance and disciplined funding practices increasingly important.
Over the 100 plans’ most recent measurement years, reported contributions to the plans totaled $260 billion, whereas benefit payments out of the plans totaled $356 billion. Governance and political constraints often complicate efforts to adjust contributions or benefits in response to changing circumstances.
Sustaining recent gains will require continued reassessment of actuarial assumptions, a commitment to transparent governance, and prudent risk management to ensure longterm stability.
Figure 1 summarizes key metrics for each plan type, highlighting similarities and differences in investments, discount rate, and funded status. Measurement dates differ between sectors, reflecting unique reporting cycles.
All three sectors benefited from strong investment returns in 2025, but funded status improvements vary due to differences in funding policies, liability measurements, and the impact of federal assistance programs. Asset allocation strategies reflect each sector’s objectives and regulatory environment.
Milliman’s 2025 studies show U.S. DB plans are, collectively, in a stronger position now than in much of the past two decades. Multiemployer and corporate plans are experiencing historically high funded ratios, while public plans have made meaningful progress despite persistent challenges.
Looking ahead, the issues facing each sector are distinct. Multiemployer plans will continue to navigate market volatility and demographic pressures. Corporate plan sponsors are expected to focus on surplus management. Public plans must balance investment performance, funding policies, and governance to sustain recent gains.
Milliman will continue to monitor these trends through annual studies and monthly indices. PC
Assessing and planning for the resources needed to restate your block of plans is critical to ensuring a smooth, stress-free restatement period once the IRS opens the restatement cycle. By Susan Poliquin
All qualified pre-approved defined contribution plans must restate their plan documents on a recurring six-year cycle, to incorporate regulatory changes since the last restatement (Cycle 3). The upcoming restatement cycle for these plans is referred to as “Cycle 4.” Note: This restatement cycle does not apply to 403(b) plans or individually designed plans.
Although not yet officially announced by the IRS, the Cycle 4 restatement period is expected to open on or around October 1, 2026, and close on September 30, 2028. Opinion letters for pre-approved documents are expected to be provided to document providers in late summer 2026.
This restatement cycle applies to employers that sponsor pre-approved defined contribution plans (profit sharing, money purchase, 401(k), governmental 401(a), and employee stock ownership plans (ESOPs)).
Employers that adopt a Cycle 4 pre-approved plan document within the restatement window, can rely on the provider’s opinion letter until the end of the fourth cycle (typically six years from when the restatement window opened).
Changes included in the Cycle 4 restatement are based on items from the 2023 Cumulative List. These include provisions from the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), Setting Every Community Up for Retirement Enhancement (“SECURE Act”), and the SECURE 2.0 Act. Note: Not all SECURE 2.0 provisions will be part of Cycle 4, and an interim amendment (in addition to the Cycle 4 restatement) may be required to maintain compliance.
Some notable items from the 2023 Cumulative List include, but are not limited to, the following:
• Required minimum distribution (RMD) rules raise the required beginning date (RBD) age to 73 beginning in 2023 and to 75 beginning in 2033.
• Increases the involuntary cash-out limit to $7,000 (up from $5,000).
• Lowers the minimum age at which a pension plan (including a money purchase plan) may allow an inservice withdrawal from 62 to 59 1/2.
• Allows plans to offer qualified birth or adoption distributions (QBADs), emergency personal expense distributions, and domestic abuse distributions without an early distribution penalty.
• Requires the inclusion of long-term, part-time employees in the plan for elective deferral purposes.
• Increases the annual limit on catch-up contributions for individuals aged 60 to 63.
Defined Contribution plans make up the majority of private-sector retirement plans (94%), according to Department of Labor (DOL) data in their Private Pension Plan Bulletin dated 7/8/2024.
As a result, Cycle 4 is likely to be the largest restatement cycle for any document provider that maintains pre-approved plans. Proper planning is critical to ensure you and your clients are prepared for this process.
Restatement is an ideal time for employer plan sponsors to review plan provisions and confirm the plan continues to meet participants’ needs. Working with plan sponsors to incorporate discretionary changes (along with the required restatement) can often reduce costs and strengthen the relationship among the plan sponsor and its advisors (financial advisor, third-party administrator, recordkeeper).
Steps to help ensure a smooth restatement process and keep the pre-approved plan document in compliance include:
• Review internal resources to ensure you are properly staffed to handle the volume of restatements needed.
• Take advantage of technology to assist in the restatement
process. This may come from internal sources or through outside vendors.
• Communicate the importance of timely restatement to all stakeholders (plan sponsors, financial advisors, and internal staff).
• Review and align documents to ensure that all provisions that the Plan Sponsor has been operating under are incorporated into the restatement.
• Update forms and procedures to help ensure ongoing operational compliance.
• Emphasize the timely adoption and execution of plan documents to plan sponsors and their advisors, particularly in the event of an audit.
A terminating plan must be updated to include all law changes in effect at the time of termination. Restating the plan before termination is a “best practice” that helps ensure it is fully compliant with current legislation. Additionally, terminating plans should be amended for any SECURE 2.0 provisions that were not included in the restatement.
MISSED DEADLINE
It should always be the goal to amend and restate in a timely
manner; however, if a plan sponsor inadvertently misses the Cycle 4 restatement deadline, remedies are available. The key to correcting any document failure is to identify and correct it as swiftly as possible. Self-correction is available under the Employee Plans Compliance Resolution System (EPCRS).
Under the Self-Correction Program (SCP), plans with a favorable opinion letter on their current plan document may correct a missed restatement deadline by adopting the updated document without contacting the IRS or paying a fee. Plan document failures cannot be self-corrected once a plan is under IRS examination unless the correction was in process before the examination began. It is also important to put safeguards in place to avoid future document failures.
Assessing and planning for the resources needed to restate your block of plans is critical to ensuring a smooth, stress-free restatement period once the IRS opens the restatement cycle.
Communicating and working with plan sponsors and their advisors to review current pre-approved documents strengthens relationships and allows sufficient time for coordination, revision, and execution of documents.
Early action reduces risk and helps ensure uninterrupted reliance for plan sponsors. PC
I believe employers will see a return on investment in more effective, knowledgeable employees who truly own their learning and their work.
By Jenn Taylor
During a “Remote Work” session at an ASPPA Annual Conference, the topic of remote training brought great debate, particularly about its effectiveness. As a former adult educator and operations trainer, I am passionate about providing effective education and training, whether in-person or remote.
The strategies outlined in this article aim to help TPA firms across the country improve their training processes, invest more effectively in their employees, and grow their businesses.
In March of 2020, when the pandemic hit, I was an Operations Trainer at my current company. Like so many others across the country and the globe, seemingly overnight, I was suddenly a remote worker.
Training transitioned from in-person at the office to online via Webex or Teams. It quickly became apparent that online training could not look the same as in-person training, so I began to draw on my prior knowledge in adult education and interaction patterns to transform my material and approach.
The best strategy I have found is to use a blended learning model to keep learners’ attention, engagement, and energy level. We’ve all faced the temptation to multitask during a call, meeting, or training; creating a setting and platform that requires people to respond, react, or engage is a great way to keep participants focused.
A blended learning model divides the training between live, online instructor-led content, asynchronous pre-recorded content with follow-up, and independent learner homework or tasks to use the skills or knowledge they are learning. There are even organizations that include Virtual Reality Training as part of their repertoire when they’ve developed such content. The more variety you can build into the learning model, the more engagement you’ll likely receive from the learner.
For live, instructor-led training, I find it a best practice to require cameras on to observe cues from “virtual body language”—a raised hand, a raised eyebrow, a confused look, or someone trying to speak while on mute. While having a camera on increases effectiveness in my experience, it’s important to avoid causing camera fatigue, which is why I suggest that the live, online training is only a portion of the day.
Besides visual cues, a good trainer can also observe what’s
happening in chat and identify learners who may be unmuting to chime in. Some more introverted learners may need to be invited to add their comments or questions, especially after observing an unmute, when someone else spoke up first.
Additionally, for live training, learners are more likely to retain and “own” the material when they are involved. Passive listening and passive learning may not drive ownership of the material. To drive engagement, require learner interaction every five minutes, by:
• Asking a concept checking question
• Inviting learners to use emoticons for their responses
• Typing responses in chat
• Asking learners to unmute and answer
• Creating a live poll
• Holding yes or no votes
• Creating a live word cloud generator
• Creating breakout rooms for partner or small group activities
• Inviting learners to share their screen and lead the activity
• Including fun get-to-know-you activities, or “Brain Breaks.”
Let’s drill down on a few of these engagement activities.
What is a concept checking question? The most common questions I have heard trainers ask during online sessions when I’ve been a trainee are: “Are there any questions?” and “Do you understand?”
These are normally ineffective prompts for engagement. While some learners will bring up their questions or what they don’t understand, more often, there’s little response. A concept-checking question asks something specific to gauge their understanding from their response.
For example: “For a distribution from a pre-tax 401(k) deferral account, what portion is taxable?” or “Which contribution source is after tax?” or “If I want to find the reasons for a hardship withdrawal under this plan, where would I look?”
While unmuting or typing responses in chat is common, learners can also use specific emoticons to indicate which option they think is correct. This could be fun for a larger class when asking a concept-checking question. Select the thumbs up emoticon for Yes, or the laughing emoticon for No! Similarly, a poll or voting option could be used either on the platform itself or with external polling options. The polls could even be created to mirror a quiz.
For a word cloud generator, perhaps the new hire class is invited to type in any words they associate with retirement plans
or the specific function they are being trained in. This may be more interesting for a larger class, but it can work for a small class too. Or, at the end of the day, learners can type in any keywords or topics to review everything that was covered.
Breakout rooms can be a great way to offer independent activities for pairs or small groups to work on a task together. The trainer can move between rooms to observe or offer help and then bring everyone back together for a review in the main room.
Lastly, brain breaks I found most useful when the training period was six to seven hours a day, lasting for many weeks. Understandably, people grow tired, weary, and stressed. Training may also cover different time zones.
I found it helpful to watch a silly dog or cat video for a couple of minutes, to get everyone laughing after lunchtime, rather than going into post-meal nap mode! The Brain Break is a few minutes of something off topic that allows learners to connect, laugh, reflect, or share about themselves.
Another strategy for blended learning is to develop shortform pre-recorded training for asynchronous learning. Include an activity for the learner to complete after watching, or have a feedback session afterward with follow-up questions.
Pre-recorded training can be effective if it includes feedback, a task, or a piece of homework to reinforce the training. If that piece is left out, there will be no specific motivation to drive ownership in learning the content.
Aside from pre-recorded training, the blended model could also include worksheets or practice tasks that the learner can complete independently to practice the skills being trained. For example, the organization has a platform that stores client or policy information. After a live training session showing where to find various pieces of data and how to navigate the platform, the learner can have an hour to independently complete a scavenger-hunt-style worksheet to locate the correct information. The proverbial “worksheet” could be a Word document or a PDF file with questions that require them to utilize systems to research and find the data to answer the questions.
This hands-on activity helps the learner gain a sense of achievement in completing a task that also prepares them for their future role. The trainer can then go back through the worksheet with the learner to verify answers.
These methods can also be used in large classes, but the interaction patterns may vary when training two people versus a class of twenty. For large classes, chat can be highly effective and more inclusive for introverted learners.
A trainer could nominate a Chat Master to help monitor the chat for questions and responses. For a large class, an online poll or vote may be more fun and interesting than if there were only two people. Breakout Rooms would be better suited for larger classes, though even small classes could benefit from pair work opportunities.
When a learner has the chance to work through a task themselves, with the help of a teammate, this encourages ownership of the content and what they are learning.
Let’s not forget team building! When working with remote new hires, they must meet their teammates and start building bonds. I’ve assigned “homework” to new hires: call one teammate every afternoon with specific questions to learn more about them and their experience on the team they’re joining.
In the office, teammates can go to each other’s desks, catch up, or ask questions when needed. This is hard to emulate with remote work, but having a scheduled call can help build those bonds and encourage future collaboration.
In summary, try utilizing a blended learning model by adding pre-recorded training and independent learner activities to your live online training. Encourage connections with teammates. Greatly increase engagement opportunities in live online training and provide a variety of ways for learners to interact.
While it takes time to develop this training content and the engagement opportunities, I believe employers will see a return on that investment with more effective, knowledgeable employees who truly own their learning and their work. PC
BY SHANNON EDWARDS, CHAD JOHANSEN, AND RICKIE TAYLOR
Understanding the tax code is one thing. Translating it into a compliant, well-run retirement plan and doing so consistently is another challenge entirely.
ERISA compliance requires more than knowledge of the rules. It requires the ability to interpret evolving guidance, apply it operationally, and document decisions in a way that stands up over time. Even sophisticated 401(k) teams face this reality. For small and mid-sized employers simply trying to offer a meaningful benefit, the distance between understanding the rules and executing them correctly can be significant.
As an industry, we have invested heavily in two important goals: bringing retirement savings opportunities to more working Americans and leveraging technology, operational efficiency, and fiduciary outsourcing to make plan sponsorship more feasible.
We must not lose sight of the fact that many small- and medium-sized businesses remain hesitant to sponsor a plan due to perceived operational complexity. Owners often worry about making mistakes, missing deadlines, handling employee questions incorrectly, or creating liability they do not fully understand. If we are going to narrow the coverage gap —
through tax credits, state mandates, and broader access — we must continue to make plan operations easier.
It is no surprise, then, that plan sponsors and advisors are increasingly exploring ways to offload day-today plan operations. Automation in tracking eligibility, long-term part-time employees, Roth catch-up candidates, vesting, and contribution processing are among the most sought-after support sponsors seek today. Many of these services can be improved through stronger payroll connectivity and provider technology, often with little or no increase in plan cost.
At the same time, the industry has seen increased attention to moving beyond operational support and toward outsourcing fiduciary and administrative responsibilities, including those defined under ERISA Sections 3(16) and 402(a). While these solutions can provide meaningful value in the right circumstances, they are not one-size-fitsall. The decision should be driven by plan complexity, internal resources, and risk tolerance, not simply the availability of the service itself.
With that in mind, it helps first to understand what sponsors are actually outsourcing when engaging a provider in these capacities.
Retirement plan sponsors face a complex web of regulatory responsibilities and potential ERISArelated liability. A 3(16) fiduciary generally agrees to serve as Plan Administrator as defined by ERISA, taking on selected operational oversight and compliance responsibilities. Depending on the provider arrangement, this may include helping maintain the plan document, distributing participant notices such
as Summary Plan Descriptions, Summary Annual Reports, Safe Harbor notices, Qualified Default Investment Alternatives notices, fee disclosures, and blackout notices, as well as monitoring eligibility and enrollment processes.
In practical terms, many sponsors look to a 3(16) provider to help reduce the burden of routine day-to-day plan administration tasks. That may include tracking entry dates, monitoring hours of service, validating eligible compensation, helping ensure eligible employees receive enrollment materials, and supporting timely participant communications.
Some 3(16) providers also assist with signing and filing Form 5500, Form 8955-SSA, extension filings, hardship and Qualified Domestic Relations Order review, cash-out processing for small, terminated balances, correction programs, and annual plan reviews. Where errors occur, the provider may help identify voluntary correction options and coordinate remediation steps.
For a sponsor without dedicated HR or benefits staff, these tasks can be meaningful. Even simple items such as tracking a rehire date, identifying a
missed deferral election, or ensuring a notice went out on time can become difficult when internal teams are stretched thin.
However, not all 3(16) providers offer the same scope of services. Some provide limited tiers focused primarily on notice delivery and filings, while others offer broader day-to-day administrative oversight. Sponsors should understand exactly what is included, what remains with the employer, and what responsibilities are shared with the TPA or recordkeeper.
Even with a 3(16) fiduciary in place, the Plan Sponsor typically remains responsible for supplying accurate and timely payroll data (we will get to this crucial point later), remitting contributions and loan repayments, communicating ownership or entity changes, maintaining required
insurance, and forwarding notices received from the Internal Revenue Service or Department of Labor.
402(a) Named Fiduciary Services are generally positioned as a broader fiduciary governance solution. A provider may act as the Named Fiduciary and, in some cases, also the Plan Administrator.
These services often focus on plan oversight, provider monitoring, fee benchmarking, governance processes, and help maintain the plan’s taxqualified status through formal review procedures.
In many arrangements, a 402(a) provider may help oversee the plan’s service providers, review fee reasonableness, monitor whether required processes are being followed, and maintain documentation of committee or governance decisions. This can be particularly appealing to sponsors seeking a more formal governance framework.
For example, an employer with multiple internal decision-makers may value a designated fiduciary structure with scheduled reviews, documented oversight, and clearer accountability. A growing company with limited committee experience may want outside support in establishing prudent governance habits.
A notable instance in which a 402(a) Named Fiduciary proves advantageous is when an international entity maintains a U.S.-based operation with American employees interested in participating in a Qualified Retirement Plan, such as a 401(k). Challenges may arise if
no authorized individual residing in the United States is available to execute the plan documents for the 401(k). In this case, the 402(a) Named Fiduciary can assume responsibility for executing the necessary plan documents, thereby enabling American employees to access the 401(k) plan. Employing a 402(a) fiduciary may help reduce risk by shifting the specified fiduciary responsibilities for plan compliance onto these professionals. They serve as an essential link between foreign parent firms and U.S. compliance regulations.
Some providers market 402(a) services to reduce personal liability concerns for owners or executives who otherwise feel they are serving in plan fiduciary roles without sufficient expertise. While this can be valuable, sponsors should understand that governance support is only as strong as the processes behind it.
As with 3(16) services, the actual duties accepted under a 402(a) arrangement depend heavily on the contract and provider model. Titles alone do not define accountability— service agreements do.
More plan sponsors are hearing about 3(16) and 402(a) fiduciary services. Plans are getting more complex, and legal and regulatory scrutiny is increasing. It can sound appealing to hand some responsibility to an outside expert, and in some situations, outsourcing can be a smart move. But these terms have also become common buzzwords, and many providers market them as universal solutions.
The practical question is: what problem are we trying to fix, and is it already being handled today?
In many plans, day-to-day administration and many compliance tasks are already shared across a capable team of providers: a Third Party Administrator that handles testing, Form 5500 support, and plan document interpretation; a recordkeeper that assists with eligibility, loans, distributions, and notices; and a payroll system that manages compensation data, deferral elections, and contribution timing.
When those providers work well together, many of the risks these services are designed to address such as missed eligibility, incorrect deferrals, late deposits, and unclear ownership may already be managed.
These services often add the most value when there is no internal expertise, poor coordination among providers, repeated operational errors, rapid growth straining internal processes, or heightened concern around fiduciary accountability.
For example, a fast-growing employer hiring across multiple states may struggle to keep eligibility and payroll data synchronized. A familyowned business without HR staff may simply want a more formal process and clearer accountability. A company that has already experienced correction costs may decide proactive oversight is worth the expense.
On the other hand, if a sponsor already has a strong TPA, a proactive recordkeeper, and a reliable payroll process, adding another fiduciary layer can duplicate work, blur roles, and increase costs without materially reducing risk.
“SOMETIMES THE GREATEST OPERATIONAL GAIN COMES FROM IMPROVING THE CONNECTION BETWEEN EXISTING PROVIDERS RATHER THAN ADDING ANOTHER PROVIDER TO SUPERVISE BROKEN PROCESSES.”
Not all 3(16) providers take on the same duties or operate proactively. If the underlying processes are weak, simply layering on a fiduciary designation does not automatically solve the root issue. In some cases, it can create a false sense of security if the sponsor assumes all risk has been transferred when it has not.
Whether a plan uses outsourced fiduciary services or not, many of the most common operational risks begin with payroll.
Eligibility dates, hours tracking, compensation definitions, deferral elections, loan repayments, catch-up monitoring, and contribution timing all depend on accurate payroll data being delivered to the recordkeeper and other providers in a timely manner.
If payroll data is delayed, manually uploaded, coded inconsistently, or not reviewed, even the strongest service model becomes reactive. Errors are often found after payroll runs, after contributions are late, or after a participant raises a concern.
Examples include missed automatic enrollment deductions, compensation coded incorrectly for matching purposes, delayed remittance of elective deferrals, or failure to recognize
an employee reaching an eligibility threshold. In many cases, these are not fiduciary title problems — they are data flow problems, and these problems will exist regardless of who the named fiduciary is.
A clean payroll connection usually means automated, timely data flow; accurate mapping of compensation and employee data; clear ownership of exception review; consistent coordination among payroll, the recordkeeper, and the TPA; visibility into failed files or rejected transactions; and a process for resolving discrepancies before the next payroll cycle.
When this foundation exists, service providers can become proactive instead of reactive. Eligibility can be monitored in real time. Deferrals can begin timely. Contributions can be transmitted faster. Errors can be corrected before they become costly operational failures. If outsourcing 3(16) and/or 402(a) duties is indeed the right fit for a client, then we recommend finding a resource that validates the per-pay-period contribution before the dollars hit the trust. This way, errors can be addressed in real time and corrected before investments are made.
Sponsors should also remember that many providers already offer robust payroll integrations without requiring a separate fiduciary engagement.
Sometimes the greatest operational gain comes from improving the connection between existing providers rather than adding another provider to supervise broken processes.
In many cases, improving payroll integration may solve more real-world problems than adding another layer of fiduciary services.
LET’S WRAP!
3(16) and 402(a) services can provide meaningful value when they solve genuine governance, accountability, or resource challenges. But they are not just buzzwords or automatic solutions, and they are not substitutes for strong daily execution.
Before purchasing any service, plan sponsors should first identify where the actual risk exists in their plan operations. If the issue is poor data flow, weak payroll processes, or provider disconnects, the better answer may be operational improvement rather than additional outsourcing.
If the issue is truly governance, lack of ownership, recurring compliance breakdowns, or limited internal resources, outsourced fiduciary support may be the right fit.
The key is matching the solution to the problem. As the saying goes: “If you can’t name the problem, don’t buy the solution.” PC
BY KIRSTEN CURRY, LAUREN STROBEL, AND LYNN YOUNG
If you’ve spent any time in the trenches of retirement plan administration, you know that ASPPA exam prep gives you the foundation — but not the full picture. The real retirement plan world has become more out-of-the-box, more creative, and occasionally downright strange.
For every clean, textbookperfect 401(k) plan, there’s another that makes you wonder, “What are they thinking?”
Across the industry, TPAs are increasingly encountering plan requests that fall outside the traditional mold. They’re legal, they’re useful, and they’re growing — but they also require a level of nuance and vigilance that no multiplechoice exam captures.
Among the most notable “you won’t find this in your study guide” plan types are Cannabis Retirement Plans, Guild Plans, and ROBS (Rollovers as Business Startups) arrangements. Each represents a unique intersection of regulation, business reality, and creative plan design. Below, we take a closer look at these three outoftheordinary plan types — starting with the one that tends to demand getting into the weeds, so to speak.
If you ever want to watch a room full of retirement professionals simultaneously nod in understanding and wince in sympathy, just mention the phrase “cannabis retirement plan.”
Few plan types generate as much industry consternation — and for good reason. They’re the perfect blend of complexity, contradiction, and compliance gymnastics. In other words, they keep retirement plan service providers on their toes.
The cannabis industry is booming, with thousands of employers now operating legally under state law. The cannabis industry is one of the fastestgrowing adopters of employersponsored retirement plans in the country.
Employers are responding to statemandated retirement requirements, competitive pressure, and a workforce that increasingly expects real benefits — not just a paycheck and a discount on gummies. And yet, the entire industry sits in a regulatory gray zone that makes plan administration uniquely challenging.
The core issue is simple: Cannabis is legal at the state level but remains illegal at the federal level. That means TPAs, recordkeepers, and financial institutions must navigate a landscape in which the employer is legal in one jurisdiction but prohibited in another. It is operationally complicated everywhere in between.
This tension shows up everywhere:
• Banking access is limited, which complicates contributions, payroll integration, and trust arrangements.
• Recordkeepers and custodians may decline cannabis clients, forcing TPAs to get creative with vendor selection.
• Plan fiduciaries must still meet ERISA standards, even when the business itself cannot access traditional financial services.
• Service providers must evaluate risk, not only in terms of compliance but also reputational
exposure and operational continuity.
And yet, despite the challenges, cannabis retirement plans work—and they work well—when designed and administered thoughtfully. In fact, they often highlight the best of what TPAs do: problemsolving, compliance navigation, and client education.
Cannabis retirement plans often look surprisingly mainstream. Cannabis employers are adopting Roth contributions, participant loans, inservice distributions, automatic enrollment, automatic escalation, employer-matching contributions, and qualified default investment alternatives—features commonly found across the broader retirement plan landscape.
However, the economics of a retirement plan can differ greatly for cannabis enterprises. Internal Revenue Code §280E generally prevents cannabis businesses from deducting ordinary and necessary business expenses, including employer retirement plan contributions.
Although plan sponsorship remains fully permissible under ERISA, the inability to deduct contributions reduces the aftertax efficiency of discretionary funding.
This dynamic helps explain why profitsharing contributions are less common among cannabis employers, even as plan design and participant features continue to mature.
In other words, these plans aren’t “alternative.” They’re...retirement plans.
These plans also underscore a broader truth: retirement plan access shouldn’t depend on the quirks of federalstate legal conflict. Employees in the cannabis industry deserve the same opportunity to save for retirement as employees in any other field. Many cannabis employers are eager to offer competitive benefits.
The takeaway is simple: cannabis retirement plans are no longer the oddball exception — they’re becoming essential infrastructure. And while ASPPA exam prep won’t teach you how to administer a plan for a federally illegal business with statemandated retirement obligations, the real world will.
WHEN
For people working in the entertainment industry — actors, directors, writers — retirement benefits don’t always come from just one place. It’s common to have benefits building up in both guild pension plans and a retirement plan sponsored by a personal “loan-out” corporation.
A loan-out corporation typically employs the individual and contracts with studios or production companies for their services. Even though the studio is the one making contributions to a guild pension plan, the IRS generally treats the loan-out corporation as the employer tied to those benefits.
Under the §415 rules, benefits from the loan-out plan and the guild plans are aggregated when testing against the annual limits. In practice, that means guild plans don’t just take the benefits from the loan-out plan at face value.
Before they start paying benefits, they’ll typically want confirmation that the §415 limits are satisfied across all relevant plans to ensure their plan is compliant.
One of the biggest issues is that aggregation isn’t limited to what’s already been earned. The solution is not to pay out the benefits from the loan-out plan first and kick the §415 problems down the road.
You must also look forward, projecting benefits for different possible retirement dates, including early retirement. If those projections aren’t done carefully, a client can end up expecting a certain benefit, only to have the guild reduce it later based on their own calculations.
The key lies in the loan-out plan’s design. Consideration needs to be given to the design of the benefit formula, actuarial assumptions, form of benefit, and the coordination of the timing of when the benefits commence.
There are a couple of important limitations on aggregation:
• Multiemployer plans are only aggregated for benefits tied to the same employer.
• Different guild plans aren’t
aggregated with each other.
• Benefits are aggregated for the §415 dollar limit, not the high three-year average pay §415 limit.
If a loan-out plan is terminated before guild benefits begin, and each guild plan can pass 415 testing on its own when combined with just that loan-out plan, it may still be possible to preserve full benefits across the board.
Defined contribution plans still need to satisfy §415(c) and the deduction limit under §404(a)(3) when combined. However, they do not need to be combined for purposes of the 6% of pay exception to §404(a)(7).
Working with clients who have both guild and loan-out plans takes a bit more upfront effort than usual. You need good data, realistic projections, and a plan that’s been thought through in advance.
For entrepreneurs exploring how to tap into their retirement savings to start and fund their own business, Rollover as Business Startup (ROBS) plans go beyond traditional investing — allowing the retirement plan itself to become an owner.
While the acronym “ROBS,” coined by the IRS, may raise a few eyebrows, the structure itself is grounded in established law.
ROBS arrangements rely on statutory exemptions under ERISA and the Internal Revenue Code that permit qualified plans to invest in employer securities — allowing retirement assets, under specific guidelines, to be used to purchase stock in a closely held business.
When executed properly, this structure allows entrepreneurs to access capital without triggering taxes or early withdrawal penalties, making it an attractive option for those looking to launch or acquire a business, provided it operates as an active trade or business.
Often used in conjunction with an SBA loan (or other financing) to fund franchise startups or business
acquisitions, the employer is in a unique position of sponsoring a retirement plan at the very start of its operations — where, ideally, the growth of the business can also drive growth in the plan’s investment over time.
A C corporation is formed, and a qualified plan is established with provisions allowing investment in qualified employer securities.
Pre-tax retirement funds are rolled into the plan and used to purchase the corporation’s stock, creating working capital for the business.
That working capital can then be used for legitimate business expenses.
From a plan design perspective, ROBS arrangements are often less “out of the ordinary” than they first appear.
The qualified plan itself is typically structured much like a traditional plan, offering familiar features such as profit sharing, and, in many cases, employee deferrals, automatic enrollment, or safe harbor contributions.
In other words, while the funding mechanism may be unique, the plan is still expected to operate as a retirement plan for the benefit of its participants.
That said, in a ROBS structure, the plan becomes a shareholder in the C corporation, bringing a heightened level of responsibility. Since plan operations and corporate governance are closely intertwined, the plan must remain actively managed — not only to maintain compliance but also to ensure the structure continues to operate as intended throughout the plan’s lifecycle.
This includes careful attention to Form 5500 reporting of employer securities, valuation support, and clear documentation of stock transactions — areas where the level of oversight and expertise can make all the difference in supporting the plan and its participants.
Now, if you’ve ever worked with a small business owner, you know that entrepreneurs are often wearing multiple hats – and retirement plan administration doesn’t always rise to the top of the list.
This is where a team of experienced professionals, specializing in ROBS plans and understanding both ERISA and closely held corporate structures, plays an important role in helping plan sponsors stay engaged and aligned with their ongoing responsibilities.
In practice, this often extends beyond the TPA or ROBS provider to include an ERISA attorney, CPA, and financial advisor.
Cannabis plans, guild plans, and ROBS arrangements may seem like outliers. Still, they represent a broader trend: retirement plan services are evolving faster, and traditional education may not keep up.
Sponsor expectations and demands are changing, and technology is evolving our industry. Entrepreneurs are innovating. And TPAs are increasingly called upon to support plan types that don’t fit neatly into the standard 401(k) mold.
These plans matter because they expand access to retirement savings. They matter because they challenge us to think creatively. And they matter because they highlight the essential role retirement plan providers, including TPAs, play in translating complex regulations into practical, workable solutions.
ASPPA exam prep gives you the rules. Realworld practice gives you the exceptions. And sometimes, it’s the exceptions that teach you the most. PC
BY JOHN ICKEL
egulation of retirement plans appears at times to be a perpetual motion machine. So, it comes as no surprise — although it is impressive — that almost five dozen laws enacted over the last 40 years include provisions affecting retirement plans.
P.L. 100-647: Technical and Miscellaneous Revenue Act of 1988 (TAMRA)
https://www.congress.gov/100/statute/STATUTE-102/ STATUTE-102-Pg3342.pdf
The Technical and Miscellaneous Revenue Act of 1988, enacted on Nov. 10, 1988, includes a variety of provisions directly relevant to retirement plans, including those that amend:
• limitation and nondiscrimination requirements applicable to pensions and deferred compensation plans;
participation by new employees who are close to retirement and to freeze benefits for participants over age 65; (2) establishing stricter funding rules for defined benefit plans; and (3) mandating faster vesting schedules.
P.L. 99-514: Tax Reform Act of 1986 (TRA’ 86)
https://www.congress.gov/99/statute/STATUTE-100/ STATUTE-100-Pg2085.pdf
The Tax Reform Act of 1986 affected defined contribution plan contribution limits, put restrictions on participant contributions, tightened nondiscrimination testing, and cut the maximum allowable vesting period in half for most employees in qualified private-sector DB plans.
P.L. 100-203: Omnibus Budget Reconciliation Act of 1987 (OBRA ‘87)
https://www.congress.gov/100/statute/STATUTE-101/ STATUTE-101-Pg1330.pdf
The provisions of the Omnibus Budget Reconciliation Act of 1987 that affected retirement plans included those that (1) amended the Internal Revenue Code (IRC) and ERISA to increase the amount charged to the funding standard account in the case of single-employer DB plans with more than 100 participants and an unfunded current liability for any plan year; (2) set forth the formula for determining the amount of this increase; (3) limit the increase to the amount necessary to increase the funded current liability percentage to 100%; (4) state that, with respect to plan years 1988 and thereafter, certain regulations that permit asset valuations based on a range of average value shall have no force and effect except with respect to multiemployer plans; and (5) revise provisions governing the period during which employer contributions to pension plans may be made after the close of a plan year.
• TRA and IRC provisions dealing with the treatment of distributions and various other aspects of pensions and deferred compensation plans;
• limitations on contributions and benefits under a qualified plan;
• special rules for simplified employee pensions (SEPs);
• the application of nondiscrimination rules to integrated plans;
• minimum employee coverage requirements for qualified plans; and
• nondiscrimination requirements for employer matching contributions, employee contributions, and taxsheltered annuities.
TAMRA also added new provisions to address employers with only highly compensated employees, as well as prohibiting employees from electing a salary reduction arrangement when the SEP does not meet the requirements to ensure the distribution of excess contributions.
P.L. 101-508: Omnibus Budget Reconciliation Act of 1990 (OBRA’ 90)
https://www.govinfo.gov/content/pkg/STATUTE-104/pdf/ STATUTE-104-Pg1388.pdf
The provisions of the Omnibus Budget Reconciliation Act of 1990, enacted Nov. 5, 1990, relevant to retirement plans include those that amend the IRC to increase the tax on reversion of qualified plan assets to employers and amend the ERISA to require the fiduciary of a terminated plan and the fiduciary of a qualified replacement plan to discharge their duties in accordance with specified requirements if, in connection with the termination of a single-employer pension plan, there is an election to establish or maintain a qualified replacement plan or to increase benefits.
P.L. 102-318: Unemployment Compensation Amendments of 1992 (UCA)
https://www.congress.gov/102/statute/STATUTE-106/ STATUTE-106-Pg290.pdf:
The provisions of the UCA, enacted July 3, 1992, relevant to retirement plans include those that
• revise the IRC concerning the taxability of a beneficiary of an employee’s trust;
• modify rules for rollover and withholding on nonperiodic pension distributions;
• allow tax-free rollovers of any part of the taxable portion of a distribution (other than a minimum required distribution) from a qualified pension or annuity plan (or tax-sheltered annuity) to an IRA or another qualified pension plan or annuity;
• require qualified pension and annuity plans to allow their participants the option of trustee-to-trustee transfers whereby any eligible tax-free rollover distribution is transferred directly to a participantdesignated eligible transferee plan — an IRA, qualified annuity plan, or qualified defined contribution retirement plan; and
• require plan administrators to explain such a direct transfer option before making a distribution eligible for a tax-free rollover.
P.L. 103-66: Omnibus Budget Reconciliation Act of 1993 (OBRA’ 93)
https://www.congress.gov/103/statute/STATUTE-107/ STATUTE-107-Pg312.pdf
The provisions of the Omnibus Budget Reconciliation Act of 1993, enacted Aug. 10, 1993, relevant to retirement plans include those that reduce the compensation taken into account in determining contributions and benefits concerning qualified retirement plans.
P.L. 103-465: Uruguay Round Agreements Act (amendments to the General Agreement on Trade and Tariffs, most commonly referred to as GATT)
http://www.gpo.gov/fdsys/pkg/BILLS-103hr5110eh/pdf/ BILLS-103hr5110eh.pdf
Subtitle D of this law requires the president to seek the establishment in the GATT 1947, and — upon entry into force of the World Trade Organization (WTO) agreement — of a WTO working party to examine the relationship of internationally recognized worker rights to the articles, objectives, and related instruments of the GATT 1947 and of the WTO.
P.L. 104-188: Small Business Job Protection Act of 1996 (SBJPA)
http://www.gpo.gov/fdsys/pkg/PLAW-104publ188/pdf/ PLAW-104publ188.pdf
Subtitle D of this law contains provisions that include repeal of 5-year income averaging for lump-sum distributions, establishment of savings incentive match plans for employees of small employers, extension of simple plans to 401(k) arrangements, making homemakers
eligible for a full IRA deduction, creating the definition of highly compensated employees, nondiscrimination rules for qualified cash or deferred arrangements and matching contributions, and the definition of compensation for purposes of Internal Revenue Code Section 415.
P.L. 105-34: Tax Relief Act of 1997 (TRA’ 97)
http://www.gpo.gov/fdsys/pkg/PLAW-105publ34/pdf/PLAW105publ34.pdf
Subtitle H of this law includes provisions that increase the pension accrued benefit distributable without consent to $5,000 and repeal the excess distribution and excess retirement accumulation tax.
P.L. 105-206: IRS Restructuring and Reform Act of 1998 (RRA or IRRA)
http://www.gpo.gov/fdsys/pkg/PLAW-105publ206/pdf/ PLAW-105publ206.pdf
This law restructured the IRS, including the offices that administer the portions of the Internal Revenue Code relevant to, and governing, retirement benefits and plans, and those who serve and administer them.
P.L. 106-229: Electronic Signatures in Global and National Commerce Act (E-SIGN)
http://www.gpo.gov/fdsys/pkg/PLAW-106publ229/pdf/ PLAW-106publ229.pdf
This law addresses the use of electronic signatures, a matter that has been a subject of ongoing debate regarding documentation, claims, and forms relevant to retirement plans.
P.L. 106-554: Community Renewal Tax Relief Act of 2000 (CRA) (part of the Consolidated Appropriations Act)
http://www.gpo.gov/fdsys/pkg/PLAW-106publ554/pdf/ PLAW-106publ554.pdf
This measure includes provisions affecting the Railroad Retirement Board and the benefits it administers; the retirement benefits of members of the House of
P.L. 107-147: Job Creation and Worker Assistance Act of 2002 (JCWAA)
http://www.gpo.gov/fdsys/pkg/PLAW-107publ147/pdf/ PLAW-107publ147.pdf
This measure includes provisions that affect Social Security and made technical corrections to EGTRAA.
P.L. 107-204: Sarbanes-Oxley Act of 2002,
http://www.gpo.gov/fdsys/pkg/PLAW-107publ04/pdf/PLAW107publ204.pdf
Sarbanes-Oxley includes provisions that affect investments and transactions that directly and indirectly affect retirement programs.
P.L. 108-218: Pension Funding Equity Act of 2004 (PFEA)
http://www.gpo.gov/fdsys/pkg/PLAW-108publ218/pdf/ PLAW-108publ218.pdf
This law amends ERISA and the Internal Revenue Code of 1986 to temporarily replace the 30-year Treasury rate with a rate based on long-term corporate bonds for certain pension plan funding requirements.
P.L. 108-311: Working Families Tax Relief Act of 2004
http://www.gpo.gov/fdsys/pkg/PLAW-108publ311/pdf/ PLAW-108publ311.pdf
This measure includes provisions that make technical corrections to EGTRRA.
P.L. 108-357: American Jobs Creation Act of 2004
http://www.gpo.gov/fdsys/pkg/PLAW-108publ357/pdf/ PLAW-108publ357.pdf
This law includes provisions that amend Internal Revenue Code (IRC) Section 4975(d) concerning the sale of bank stock in IRAs, expansion of bank S corporation eligible shareholders to include IRAs, and modification of the minimum cost requirement for the transfer of excess pension assets.
P.L. 109-8: Bankruptcy Abuse Prevention and Consumer Protection Act of 2005
http://www.gpo.gov/fdsys/pkg/PLAW-109publ8/pdf/PLAW109publ8.pdf
This measure includes a provision that excludes employee benefit plan participant contributions and other property from the estate
P.L. 109-37: Katrina Emergency Tax Relief Act of 2005 (KETRA)
http://www.gpo.gov/fdsys/pkg/PLAW-109publ37/pdf/PLAW109publ37.pdf
This measure includes special rules for use of retirement funds for relief related to Hurricane Katrina; among them are tax-favored withdrawals from retirement plans, recontributions of withdrawals for home purchases canceled due to Hurricane Katrina, and loans from qualified plans for relief relating to Hurricane Katrina.
P.L. 109-135: Gulf Opportunity Zone Act of 2005 (GOZA) http://www.gpo.gov/fdsys/pkg/PLAW-109publ135/pdf/ PLAW-109publ135.pdf
Hurricanes Katrina, Rita, and Wilma, which includes special rules for the use of retirement funds and a provision that IRC Section 72(t) shall not apply to qualified distributions related to hurricanes.
P.L. 109-171: Deficit Reduction Act of 2005 (DRA 2005) http://www.gpo.gov/fdsys/pkg/PLAW-109publ171/pdf/ PLAW-109publ171.pdf
the Pension Benefit Guaranty Corporation (PBGC) charges single-employer plans and multiemployer plans, and adjust the premiums for inflation.
P.L. 109-222: Tax Increase Prevention and Reconciliation Act of 2005 (TIPRA) http://www.gpo.gov/fdsys/pkg/PLAW-109publ222/pdf/ PLAW-109publ222.pdf
a Roth IRA from an IRA other than a Roth IRA, and repeal of related income limitations.
P.L. 109-227: Heroes Earned Retirement Opportunities Act (HERO Act)
http://www.gpo.gov/fdsys/pkg/PLAW-109publ227/pdf/ PLAW-109publ227.pdf
members of the armed forces serving in a combat zone to make contributions to their individual retirement plans even if the compensation on which such a contribution is based is excluded from gross income.
P.L. 109-280: Pension Protection Act of 2006 (PPA) http://www.gpo.gov/fdsys/pkg/PLAW-109publ280/pdf/ PLAW-109publ280.pdf
This law addresses a variety of matters relevant to pension plans, including funding rules for single-employer and multiemployer pension plans, interest rate assumptions, PBGC guarantees, disclosures, investment advice, prohibited transactions, fiduciary rules, benefit accrual standards, pension-related revenue provisions, pension plan diversification and participation, and spousal pension protection.
P.L. 109-432: Tax Relief and Health Care Act of 2006 http://www.gpo.gov/fdsys/pkg/PLAW-109publ432/pdf/ PLAW-109publ432.pdf
This measure includes a provision addressing one-time distributions from individual retirement plans to fund health savings accounts (HSAs).
determination of market rate of return for governmental plans, treatment of certain reimbursements from governmental plans for medical care, rollover of amounts received in airline carrier bankruptcy to Roth IRAs, and modification of penalties for failure to file partnership returns and S corporation returns. The law also contains provisions related to the Great Recession, including a temporary waiver of required minimum distribution rules for certain retirement plans and accounts, a temporary modification of the application of limitations on benefit accruals, and a temporary delay of the designation of multiemployer plans as in endangered or critical status.
P.L. 111-148: Patient Protection and Affordable Care Act of 2010 (PPACA)
http://www.gpo.gov/fdsys/pkg/PLAW-111publ148/pdf/ PLAW-111publ148.pdf
The PPACA includes a provision that established a temporary reinsurance program to reimburse participating employment-based plans for a portion of the cost of providing health insurance coverage to early retirees, as well as their eligible spouses, surviving spouses, and dependents. It defined “early retirees” as those who retired at age 55.
http://www.gpo.gov/fdsys/pkg/PLAW-111publ240/pdf/ PLAW-111publ240.pdf
This law includes provisions allowing participants in governmental 457 plans to treat elective deferrals as Roth contributions. It also contains provisions addressing rollovers from elective deferral plans to designated Roth accounts.
P.L. 111-312: Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010
http://www.gpo.gov/fdsys/pkg/PLAW-111publ312/pdf/ PLAW-111publ312.pdf
This measure provides for the temporary extension of tax relief under EGTRRA, including a two-year extension of tax-free distributions from individual retirement plans for charitable purposes.
P.L. 112-141: Moving Ahead for Progress in the 21st Century Act (MAP-21)
http://www.gpo.gov/fdsys/pkg/PLAW-112publ141/pdf/ PLAW-112publ141.pdf
This law extends the ability to make transfers of excess pension assets to retiree health accounts, as well as to retiree group term life insurance accounts.
P.L. 112-240: American Taxpayer Relief Act of 2012 http://www.gpo.gov/fdsys/pkg/BILLS-112hr8enr/pdf/BILLS112hr8enr.pdf
The American Taxpayer Relief Act of 2012 includes provisions that extend the ability to make tax-free distributions from individual retirement plans for charitable purposes and that state that during sequestration, amounts in applicable retirement plans may be transferred to designated Roth accounts without distribution.
P.L. 113-67: Bipartisan Budget Act of 2013 http://www.gpo.gov/fdsys/pkg/BILLS-113hjres59enr/pdf/ BILLS-113hjres59enr.pdf
This measure includes a provision that increases contributions to new federal employees’ retirement system accounts.
P.L. 113-97: Cooperative and Small Employer Charity Pension Flexibility Act
https://www.congress.gov/bill/113th-congress/housebill/4275/text
This measure provides funding rules applicable to cooperative and small employer charity pension plans, and seeks to encourage cooperative associations and charities to continue to provide their employees with pension benefits.
P.L. 113-159: Highway and Transportation Funding Act of 2014
https://www.congress.gov/113/plaws/publ159/PLAW113publ159.pdf
The law includes provisions stating that the stabilization it addresses does not apply for purposes of certain accelerated benefit distribution rules, and that a plan shall not be treated as failing to meet the requirements of Section 204(g) of ERISA and Internal Revenue Code Section 411(d) (6) only due to a plan amendment to the measure that
P.L. 113-295: Tax Increase Prevention Act of 2014 https://www.govinfo.gov/content/pkg/PLAW-113publ295/ html/PLAW-113publ295.htm
This law includes provisions addressing the extension of amortization periods, the shortfall funding method, rules for endangered and critical plans, and tax-free distributions from individual retirement plans for charitable purposes.
P.L. 114-26: Defending Public Safety Employees’ Retirement Act
https://www.congress.gov/114/plaws/publ26/PLAW114publ26.pdf
This measure addresses early retirement distributions to federal law enforcement officers, firefighters, and air traffic controllers who are covered by governmental plans.
P.L. 114-27: Trade Preferences Extension Act of 2015 https://www.congress.gov/114/plaws/publ27/PLAW114publ27.pdf
This measure calls on the Director of the Pension Benefit Guaranty Corporation to carry out programs of public outreach, including on the Internet, to inform potential eligible individuals (as under IRC Section 35) of the availability of the election to claim a credit retroactively for coverage months beginning after Dec. 31, 2013.
P.L. 114-41: Surface Transportation and Veterans Health Care Choice Improvement Act of 2015 https://www.congress.gov/114/plaws/publ41/PLAW114publ41.pdf
This measure includes a provision addressing transfers of excess pension assets to retiree health accounts.
P.L. 114-74: Bipartisan Budget Act of 2015
https://www.congress.gov/114/plaws/publ74/PLAW114publ74.pdf
P.L. 113-235: Multiemployer Pension Reform Act of 2014
The provisions of this law include those concerning
repeal of reorganization rules for multiemployer plans, required disclosure of multiemployer plan information, Pension Benefit Guaranty Corporation premium increases multiemployer plans in critical and declining status, and
This law includes provisions that address annual singleemployer plan premiums the Pension Benefit Guaranty Corporation charges, acceleration of pension payments, funding stabilization under ERISA, and voluntary suspension of Social Security benefits.
P.L. 114-94: Fixing America’s Surface Transportation (FAST) Act
https://www.congress.gov/114/plaws/publ94/PLAW114publ94.pdf
This law includes provisions that involve the importance and use of Social Security numbers.
P.L. 114-113: Protecting Americans from Tax Hikes Act (PATH Act) of 2015
https://www.congress.gov/114/plaws/publ113/PLAW114publ113.pdf
This measure includes provisions relevant to the Department of Defense Military Retirement Fund, Central Intelligence Agency Retirement and Disability System Fund, Civil Service Retirement and Disability Fund, Office of Personnel Management’s retirement program, Judicial
Officers’ Retirement Fund, Judicial Survivors’ Annuities Fund, United States Court of Federal Claims Judges’ Retirement Fund, and retirement pay and medical benefits for commissioned officers.
P.L. 115–63: Disaster Tax Relief and Airport and Airway Extension Act of 2017
http://bit.ly/2jc4ByI
This law includes provisions concerning special disaster-related rules for use of retirement funds, taxfavored withdrawals from retirement plans related to a qualified hurricane disaster, and treatment of repayments of distributions from eligible retirement plans other than IRAs.
P.L. 115-97: Tax Cut and Jobs Act of 2017
http://bit.ly/2Cj4s5E
This law includes provisions that concern special rules for the use of retirement funds concerning areas damaged by the 2016 disasters, tax-favored withdrawals from retirement plans, treatment of repayments of distributions from eligible retirement plans other than IRAs, and transfers of amounts to eligible retirement plans in direct trustee-to-trustee transfers.
P.L. 115-123: Bipartisan Budget Act of 2018
http://bit.ly/2EnEhef
This law includes provisions related to the use of retirement funds in response to the wildfire disaster that took place in California between Jan. 1, 2017, and Jan. 18, 2018. Among them are provisions that state that:
• A wildfire distribution may, at any time during the 3-year period beginning on the day after the date on which such distribution was received, make one or more contributions in an aggregate amount not to exceed the amount of such distribution to an eligible retirement plan of which an individual is a beneficiary and to which a rollover contribution of such distribution could be made under Internal Revenue Code Sections 402(c), 403(a)(4), 403(b)(8), 408(d)(3), or 457(e)(16).
• If a contribution is made related to a qualified wildfire distribution from an eligible retirement plan other than an individual retirement plan, then the taxpayer shall be treated as having received the qualified wildfire distribution in an eligible rollover distribution and as having transferred the amount to the eligible retirement plan in a direct trustee-to-trustee transfer within 60 days of the distribution.
• If a contribution is made related to a qualified wildfire distribution from an individual retirement plan, then the qualified wildfire distribution shall be treated as a distribution and as having been transferred to the eligible retirement plan in a direct trustee-to-trustee transfer within 60 days of the distribution.
P.L. 116-94: Further Consolidated Appropriations Act, 2020 (includes the SECURE Act https://www.congress.gov/116/bills/hr1865/BILLS116hr1865eah.pdf
The Setting Every Community up for Retirement Enhancement (SECURE) Act comprises Division O of this law, which contains a wide range of provisions relevant to and affecting retirement plans.
P.L. 116-136: Coronavirus Aid, Relief, and Economic Security Act
https://www.congress.gov/116/plaws/publ136/PLAW116publ136.pdf
The CARES Act includes provisions that address special rules for use of retirement funds, a temporary waiver of required minimum distribution rules for certain retirement plans and accounts, distributions from retirement plan accounts related to the coronavirus, and repayments of distributions from eligible retirement plans.
P.L. 116-260: Consolidated Appropriations Act, 2021 https://www.congress.gov/116/bills/hr133/BILLS116hr133enr.pdf
This law includes provisions related to the Department of Defense Military Retirement Fund, the Central Intelligence Agency Retirement and Disability System Fund, maintaining the proper funding level for continuing the operation of the Central Intelligence Agency Retirement and Disability System, the Office of Personnel Management’s retirement plan, the Judicial Officers’ Retirement plan, and the Civil Service Retirement and Disability Fund.
P.L. 117-2: American Rescue Plan Act of 2021 (ARPA) https://www.congress.gov/117/bills/hr1319/BILLS117hr1319enr.pdf
ARPA provides for the creation of the Pension Benefit Guaranty Corporation’s (PBGC) Special Financial Assistance (SFA) program that helps financially troubled multiemployer plans. It also contains provisions related to paid leave and its impact on the calculation of federal civilian retirement benefits, extended amortization for single-employer plans, and the extension of pension funding stabilization percentages for single-employer plans.
P.L. 117-58: Infrastructure Investment and Jobs Act https://www.congress.gov/117/bills/hr3684/BILLS117hr3684enr.pdf
This law includes provisions that concern how residential energy consumption relates to being in a household that depends on retirement income.
P.L. 117-328: Consolidated Appropriations Act, 2023 https://www.congress.gov/117/bills/hr2617/BILLS117hr2617enr.pdf
The SECURE 2.0 Act of 2022 comprises Division T of this law. It includes provisions that expand automatic enrollment in retirement plans, modify the credit for small employer pension plan start-up costs, and the saver’s match. PC
Employers who solve that communication gap across language barriers will not only strengthen compliance but also improve retention, trust, and retirement outcomes across their workforce.
By Michael Kirschman
At halftime of the 2026 Super Bowl, millions of viewers watched Bad Bunny take the stage. For many, the performance was electric, entertaining, and culturally powerful. Yet a large portion of the audience likely had the same thought: I’m enjoying this, but I don’t fully understand what he’s saying.
That same experience plays out every day in the workplace, especially in employee benefits. Hundreds of thousands of employees enrolled in retirement and welfare benefit plans know their benefits are valuable. They understand that 401(k) s, health plans, life insurance, and other employer-sponsored benefits matter.
But many do not truly understand the details of how those benefits work. Sometimes this gap is caused by poor education. Employers may rely on overly technical materials, infrequent enrollment meetings, or generic handouts that fail to connect with employees. That challenge is fixable through better communication initiatives, stronger HR outreach, and more participant education.
But when the reason employees cannot understand their benefits is a language barrier, the issue becomes far more serious. This is where plan sponsors, fiduciaries, HR leaders, and benefits administrators must clearly
understand both what they are legally required to do and what they should do as a best practice.
THE REGULATORY OBLIGATION: WHAT EMPLOYERS NEED TO DO
In the retirement plan world, two key principles plan sponsors and fiduciaries must keep in mind when communicating with employees whose primary language is not English.
1) Department of Labor Foreign Language Notice Rules
The first and most direct requirement comes from the Department of Labor’s foreign language assistance rules, which apply to certain ERISA disclosures such as SPDs and other participant notices.
Under these rules, plans with fewer than 100 participants generally must provide foreign language assistance when 25% or more of the participants are literate only in the same non-English language. For plans with 100 or more participants, the threshold becomes the lesser of 500 participants or 10% of all participants.
When those thresholds are met, the plan is generally required to provide:
• A prominent statement in the relevant non-English language offering assistance
• Access to translated content or oral assistance
• A reasonable way for participants to obtain information in the language they understand
This is not simply a “nice to have.” It is a compliance issue tied directly to ERISA disclosure standards.
2) The Duty to Communicate in a Manner Participants Can Understand
The second obligation is broader but equally important. The Department of Labor has repeatedly emphasized that required notices must be written and delivered in a manner “calculated to be understood by the average plan participant.”
While this standard is less rigid than the language-threshold rules above, it gives regulators broad authority to question whether employees truly had a meaningful opportunity to understand the information provided. If a notice is technically delivered but written in a language the employee cannot read or reasonably understand, there is a strong argument that it fails the spirit, and potentially the legal standard, of understandable communication.
When these two regulatory positions are combined, the message is clear:
If your workforce includes employees whose primary language differs from the language of your notices, you should strongly consider a formal multilingual communication strategy.
The legal side is important, but there is also a strong business and workforce strategy reason to provide benefits communication in the languages that match your employee population.
Benefits only create value when employees actually use them.
The purpose of retirement benefits, health plans, and related programs is not simply to check a compliance box. The purpose is to promote participant engagement and long-term financial well-being. When employees understand their benefits, several positive outcomes follow.
Benefits are one of the strongest retention tools an employer has. Employees who understand and actively use their 401(k), employer match, health plan, and other programs view those offerings as a meaningful
extension of compensation. They are more likely to appreciate the full value of employment and remain with the organization.
Clear benefits communication also demonstrates that the employer cares about employees beyond their dayto-day output. Providing materials in a participant’s preferred language sends a strong message: We want you to understand and fully use what we provide. That creates trust and reinforces a culture of inclusion and support.
“HELPING EMPLOYEES UNDERSTAND RETIREMENT BENEFITS IN A LANGUAGE THEY CAN UNDERSTAND IMPROVES LONG-TERM RETIREMENT READINESS AND WORKFORCE TRANSITIONS.”
Retirement readiness also matters from a workforce management standpoint. One of the most difficult situations for an employer is when a long-tenured employee cannot retire because they never fully engaged with the retirement plan. This can create difficult conversations,
productivity challenges, and blocked advancement opportunities for younger talent.
Helping employees understand retirement benefits in a language they can understand improves long-term retirement readiness and workforce transitions.
The true purpose of educational and regulatory materials is to maximize participant usage. When notices, enrollment guides, and education are delivered in a language employees understand, employers dramatically increase the likelihood that participants will:
• Enroll in benefits
• Increase their use to experience their benefits
• Understand the rules of the benefits
• Maintain personal information and beneficiary designations
In short, understanding drives action and utilization.
In today’s workforce, multilingual populations are common across healthcare, hospitality, construction, manufacturing, retail, logistics, and professional services. The question is no longer whether multilingual communication matters. The real question is:
How do you build a scalable communication strategy that satisfies both compliance obligations and participant engagement goals?
APPROACH SHOULD INCLUDE:
1) Workforce Language Mapping Identify the primary languages spoken by your workforce.
2) Translated Core Notices
Translate high-impact notices such as:
• Enrollment guides
• Summary Plan Descriptions
• Safe harbor notices
• QDIA notices
• Automatic rollover notices
• Distribution and termination communications
3) Multilingual Digital Delivery
Use email, text, and digital portals that allow notices to be presented in the participant’s preferred language or, at a minimum, provide translation services that are accessible and free for all participants.
4) Video and Simplified Education
Many employees learn better through short-form video summaries, visual guides, and simplified plainlanguage explanations. With the growth of AI-generated videos, they can be produced quickly and easily.
5) Ongoing Review
As your workforce changes, your communication strategy should evolve with it.
The goal is not simply to “send a notice.” The goal is to ensure employees understand what the notice means for their future.
Just as millions enjoyed the Super Bowl halftime show without fully understanding the lyrics, many employees appreciate their benefits without fully grasping the opportunities they offer.
Employers who solve that communication gap, especially across language barriers, will not only strengthen compliance but also improve retention, trust, and retirement outcomes across their workforce. PC
From the Arctic Ocean to the Great Smoky Mountains, from the Wisconsin Dells to the Mississippi Delta, states have been pondering how to bolster private-sector employees’ retirement financial preparedness.
By John Iekel
Much has been said, and rightly so, about the coverage states provide private-sector employees whose employers do not offer a plan. The common parlance has been that this happens through staterun auto-IRAs, but that’s only part of the story — as the last few months have demonstrated.
From the Arctic Ocean to the Great Smoky Mountains, from New England to the Rockies, from the Wisconsin Dells to the Mississippi Delta, states have been pondering how to bolster private-sector employees’ retirement financial preparedness.
Like a glacier slowly advancing as winter on the North Slope progresses, the bill that would create a staterun auto-IRA in Alaska is taking incremental steps forward.
State Sen. Bill Wielchowski (D-Anchorage) introduced the bill, SB 21, on January 22, 2025. It would create Alaska Work and Save, an auto-IRA program that would offer retirement plan coverage to employees whose private-sector employers do not. Deductions from employees’ paychecks would be contributed to individual accounts each pay period. Qualified employees would be automatically enrolled, but could opt out at any time.
Wielchowski’s bill was referred to the Senate Labor and Commerce Committee, which, on April 9, 2025, sent it to the Senate Finance Committee. Fast-forward a year, and the Finance Committee advanced the
bill to the full Senate, which passed it on April 22, 2026.
Alaska Work and Save is now before the Alaska House of Representatives and was referred to two of that chamber’s committees: Labor and Commerce, and Finance. The former was scheduled to hold a hearing on the bill on April 29.
Tennessee is poised to volunteer for a role with the Trump Account funds. In fact, as of this writing, legislation to allow that was awaiting Gov. Bill Lee’s (R) signature.
But it didn’t start that way. The Tennessee legislature changed course on what action it wanted to take to boost Tennesseans’ retirement savings.
Legislation that would have laid the groundwork for a state-run retirement plan providing coverage for those whose private-sector employers do not offer one had been coursing through both chambers of the Tennessee legislature. But that language was replaced with wording that would instead authorize the state of Tennessee to serve as a non-bank custodian for Trump Account funds.
On April 6, the Tennessee House of Representatives, in an 84-7 vote, passed HB 1447. The Senate followed suit one week later in a 29-0 vote.
With the adoption of the amendment and, consequently, the new wording, the legislation now calls for the creation of the Tennessee Trump Account Program, which would authorize the state to act as a non-bank custodian for Trump Account funds, subject to
the requirements of federal law. If the state receives approval to act as such a non-bank custodian, the General Assembly could establish a Trump Account Program through the enactment of a separate measure.
RHODE ISLAND Retirement plan professionals and empowering employees to better prepare for a secure retirement are important, and a resolution before the Ocean State’s Senate expresses that and also calls for expanded access to retirement advice and guidance.
Eight Rhode Island Senators — Ryan Pearson (D-Cumberland), Tiara Mack (D-Providence), Hanna Gallo (D-Cranston), David Tikoian (D-Smithfield), Pamela Lauria (D-Barrington), Meghan Kallman (D-Pawtucket), Dawn Euer (D-Newport), and Samuel Zurier (D-Providence) — on March 4 introduced S. 2920, a Senate resolution that calls for that heightened access.
“The challenge of managing both defined benefit and defined contribution elements requires employees to make critical decisions throughout their careers that significantly impact their ultimate retirement security,” says the resolution. “Professional retirement advice provides benefits across all career stages, helping younger workers harness compound interest, midcareer workers adjust plans after life events, and pre-retirement workers understand withdrawal strategies and tax implications,” they continue.
The senators also hope to give an example to private-sector employers
as well. They argue that the state government — the employees’ employer — has “the opportunity and responsibility to lead by example by facilitating access to professional retirement advice for state employees, demonstrating commitment to the long-term financial well-being of those who serve the public.”
The resolution recommends that state retirement system administrators partner with qualified financial advice providers “to ensure employees receive holistic guidance addressing the full scope and benefits of their retirement
plans.” And it encourages integration of technology-assisted advice tools in coordination with human financial advisors.
S. 2920 has been referred to the Senate Labor and Gaming Committee.
Roth IRAs are close to being among the retirement saving options available to public employees in Colorado.
Colorado’s public employees’ retirement association (PERA) currently offers a 401(k) and a 457
plan to its members. The legislation would expand the savings vehicles available to employees so that they also include Roth voluntary contributions as an option. But it would go even further, allowing other tax-deferred options as well.
Rep. Eliza Hamrick (D-Arapahoe) and Rep. Bob Marshall (D-Douglas) introduced House Bill 26-1026 on January 14, 2026. Sen. Chris Kolker (D-Arapahoe) introduced it in the Senate on March 10.
Among the changes House Bill 261026 would make are the following.
It would:
• Amend existing law governing PERA so that it would include a provision requiring that the system’s voluntary investment include options that would allow an employee to make taxdeferred voluntary contributions and Roth voluntary contributions to the program.
• Strike language in existing law that states that publicsector employers in Colorado may affiliate with a deferred compensation plan under PERA, and instead require employers that are part of PERA to affiliate with PERA’s deferred compensation plan and offer the plan to employees.
• Require that the PERA deferred compensation plan include options that an employee may choose to make pre-tax voluntary contributions and Roth voluntary contributions to the plan.
• Strike language in the current law that exempts amounts that are deferred, including investment earnings, from federal and state income taxes until the ultimate distribution of those contributions has been made to the PERA participant, former participant, or beneficiary.
The Colorado House of Representatives passed the bill on March 5; the Senate amended it and passed the bill on April 23. Now the House must consider that version.
Mississippi considered such a step as well; the state Senate on February 5 passed a measure that would have made it possible in the Magnolia state, but on March 3, the legislation died in a House committee.
With the stroke of Gov. Spencer Cox’s (R) pen, the Beehive State not only entered the club of states providing a program that covers employees whose private-sector employers don’t have a plan of their own — it did so with its own unique twist.
If it seems like it happened quickly, that’s because it did — it took all of just 63 days. Rep. Joseph Elison (R-Washington) introduced House Bill 250 in the Utah House of Representatives on January 20, 2026; the chamber passed the bill on February 10 in a 71 - 1 – 3 vote. The Utah Senate followed suit 10 days later, exactly one month after Elison introduced it. And just a little more than a month after that, Cox signed it into law.
The new law creates the Utah Retirement Plan Exchange, a program through which eligible privatesector employers can easily set up a retirement plan through the exchange or adopt an auto-IRA program to provide coverage for their employees. The exchange will walk employers through a set of questions that guide them along a pathway to establishing the retirement program that best fits their situation.
The Utah Treasury will establish and maintain the publicly accessible online exchange. It will also be responsible for creating and disseminating educational resources for eligible employers and eligible employees concerning the exchange, and to ensure that the exchange:
• provides eligible employers access to qualified retirement plans;
• does not include retirement arrangements other than qualified retirement plans; and
• presents each qualified retirement plan with a variety of forms of information about each plan’s features and procedures.
“Utah HB 250 is not just a step in the right direction; it is a leap towards closing the retirement plan coverage gap in Utah,” said Executive Director Nathan Glassey, Executive Director of the National Tax-Deferred Savings Association (NTSA), one of ASPPA’s sister organizations in the American Retirement Association.
In an interview with Plan Consultant, Ellison made a similar observation, saying that his bill “fills a significant gap in Utah.” He added, “Over 700,000 employees in Utah
do not have access to a companysponsored retirement savings program.” Sen. Brady Brammer (R-Highland), in his remarks before the Utah Senate Business and Labor Committee in its February 19, 2026, hearing about the bill, struck a similar tone, remarking, “What this does is, it fills a gap in retirement plan savings.”
The program is also intended to help small businesses provide coverage for their employees; Elison noted that small businesses struggle to offer retirement benefits themselves. Brammer, in his February 19 testimony on the bill, attested to small businesses’ needs in that regard, drawing on personal experience. “I’m a small business owner. One of the difficult things is providing benefits to employees,” he said.
Elison added that he also hopes other states will follow Utah’s example and take a similar approach.
America’s Dairyland is considering joining the states that offer a state-run plan to provide retirement coverage to employees of private-sector employers that do not offer it.
The Senate iteration of the legislation, SB 1137, was introduced by Sen. Dianne Hesselbein (D-Middleton); Rep. Mike Bare (D-Verona) introduced AB 1179, the version put before the Assembly. The legislation called for the creation of WisEARNS, a program intended to provide a defined contribution plan for employees of private employers in Wisconsin that do not offer an employer-sponsored retirement plan or that do not offer such a plan to all employees.
In the end, Wisconsin pondered, but did not join, the other states that have established such programs. It really could not do so, at least for now. Legislation that would have created the program had been introduced in both chambers of the Wisconsin legislature very late in the legislative session, so late, in fact, that they were introduced in both the Assembly and the Senate on March
19, 2026 — which happened to be the last day of the session.
Retirement security has very much been top of mind for the government of Mississippi.
Belief in the importance of retirement savings. Employers have a key role in facilitating financially secure retirement for their employees — and, therefore, for millions of people, as well as their beneficiaries and dependents. And the Mississippi House of Representatives expressed formal support for their role in addressing what they call the urgency of addressing the need to build retirement security on February 19, when it adopted House Resolution 49, a measure that expresses the sentiment of that chamber regarding the need for action to build retirement savings and the role private-sector and public employers play in that.
The resolution states that “a convergence of demographic, economic, and policy factors, such as increasing life expectancy, rising healthcare costs, and the declining availability of traditional pension plans,” has heightened the need to boost retirement security. It adds that “the economic and social implications” of the situation “extend beyond individual households and represent a growing concern for national and state policymakers.”
The Mississippi House also encourages federal and state policymakers to encourage and promote policies that provide advice and guidance services, tools, and means to workers “to ensure they are on track for a dignified and secure retirement.”
Mississippi Work and Save. The Magnolia State has joined the club of states that provide a state-run program to boost retirement plan coverage among private-sector employees. Gov. Tate Reeves (R) on April 8 signed into law the measure that creates Mississippi Work and Save.
It didn’t take long for that to happen. Rep. Jody Steverson
(R-Alcorn/Tippah), Vice Chair of the Ways and Means Committee, introduced HB 4073, which calls for the creation of the program. On February 24, it was referred to the House Ways and Means Committee, which that day recommended passage.
The House passed it the next day, 118-1. The measure was sent to the Senate on February 26 and referred to the chamber’s Finance Committee.
The Senate passed an amended version on March 1. A conference committee ensued; both chambers adopted the conference report on March 29.
Features of Mississippi Work and Save include the following.
• It’s voluntary. One thing that sets Mississippi’s program apart is that it makes participation voluntary — the state would make the program available to employees age 18 and older who work for private-sector employers without a retirement plan. Still, those employees must make a voluntary choice to participate in it and contribute to a payroll deduction account.
• Roth IRAs. Participating employees will contribute to a Roth IRA; contributions will be invested in a target-date fund. Each account holder owns the contributions to, or earnings on, amounts contributed to their account under the program.
• Running the program. The state Treasury will have ultimate authority over the program.
• Communications.
Communication about the program is to include information about:
o benefits associated with taxfavored retirement saving;
o potential advantages and disadvantages associated with contributing to Roth IRAs;
o eligibility rules for Roth IRAs;
o responsibility of the individual for determining whether and how much the individual is eligible to contribute on a tax-favored basis to an IRA;
o penalties for excess contributions to IRAs and the method of correcting excess contributions;
o instructions for enrolling, making elections to contribute or to decline to contribute, and making elections regarding contribution rates, type of IRA, and investments;
o instructions for implementing and for changing elections;
o the potential availability of a saver’s tax credit, including the eligibility conditions for the credit and instructions on how to claim it; and
o retirement, saving, and other information designed to promote financial literacy and capability.
• Covering expenses. The measure establishes the Mississippi Work and Save Administrative Fund to cover the program’s administrative costs and expenses. and the state legislature will appropriate revenue for the Mississippi Work and Save Administrative Fund. The bill also authorizes the state to issue general obligation bonds to fund the Mississippi Work and Save Fund.
• Annual audits. The measure will require that each year, a full audit of the books and accounts of the state Treasurer about the program shall be conducted by a certified public accountant and shall include direct and indirect costs attributable to the use of outside consultants, independent contractors, and any other persons who are not state employees in administering the program.
• Mississippi Deferred Compensation Plan. The measure allows the Mississippi Deferred Compensation Plan and Trust to offer Roth as well as other aftertax compensation vehicles. The State Treasurer is required to establish the program so individuals can begin contributing to accounts established under it not later than August 1, 2028. PC
Taken together, specific efforts can meaningfully expand a TPA’s centers of influence and reinforce their role as a trusted, collaborative partner.
Third-party administrators (TPAs) typically rely on strong referral and partner relationships, and those connections remain essential to growth. What’s changed is how influence is established. Today, credibility isn’t built solely through referrals but reinforced through ongoing visibility and demonstrations of expertise.
Many industry peers and decisionmakers tend to form impressions well before a formal introduction. They notice which TPAs share useful insights, engage in industry conversations, and contribute thoughtfully over time. As a result, centers of influence can now extend beyond one-to-one referral relationships into broader credibility networks shaped by consistency, relevance, and contribution.
Personal relationships will always matter, but influence can grow faster when expertise is shared in broader industry settings. Industry events, educational forums, and collaborative environments offer TPAs opportunities to reinforce credibility with wider audiences.
Conferences, panels, and other speaking engagements help establish your point of view, while collaborative education — such as co-hosted
By Katie Boyer-Maloy
webinars or client briefings — demonstrates a team-based approach to serving clients. Thought leadership shared through trusted publications and industry forums increases visibility over time, helping build familiarity and long-term credibility beyond individual conversations.
As key relationships increasingly develop across multiple touchpoints, LinkedIn has become an important extension of in-person interactions. For TPAs, it can be a way to stay visible with professional partners — such as financial professionals, CPAs, and ERISA attorneys — between meetings, conferences, and referrals.
Used intentionally, LinkedIn doesn’t require frequent posting or self-promotion. Instead, it can support steady visibility, reinforce expertise, and strengthen centers of influence through consistent, thoughtful engagement.
Your LinkedIn profile often serves as a first impression, especially for those who may look you up before or after an introduction. Make sure it clearly reflects who you serve and the expertise you bring.
• Use a high-quality headshot and banner that reinforce credibility
• Write a headline that highlights your expertise and focus — not just your title
• Draft an “About” section that speaks to your audience and the challenges you help solve
Posting often isn’t necessary to build influence. Engaging with others’ content can be one of the most effective ways to stay visible with centers of influence on LinkedIn without requiring you to create original content.
• Comment thoughtfully on posts from partners and industry peers
• Acknowledge the author’s point, restate the key takeaway, and add your perspective
• Avoid generic comments that don’t add to the conversation
LinkedIn typically works best when connection requests feel relevant and personal.
• Engage with someone’s content before sending a connection request
• Reference a shared topic, event, or recent post in your note
• Focus on relevance and rapport, not immediate business outcomes
Original content doesn’t need to be polished or promotional to be effective. One thoughtful post per week can reinforce credibility.
• Share observations from client conversations (without specifics)
• Highlight trends, regulatory considerations, or common challenges you’re seeing
• Focus on practical insight rather than polished marketing language
Influence can grow through interaction and followthrough.
• Respond to comments and continue conversations where appropriate
• Acknowledge others’
perspectives, even when they differ
• Use online engagement to support relationships that may later continue offline
When used consistently, LinkedIn becomes less about posting and more about staying present, relevant, and connected within your professional community.
Expanding centers of influence can be built through intentional, repeatable actions, not one-time efforts. The steps below are simple ways to help turn everyday visibility and engagement into stronger, longterm relationships over time.
• Identify two or three professional partner groups—such as CPAs, ERISA attorneys, financial
professionals, or payroll providers — you want to build stronger relationships with this year.
• Look for opportunities to collaborate through education, industry events, or shared insights via LinkedIn.
• Review your LinkedIn profile to ensure it clearly reflects your expertise and focus.
• Commit to engaging thoughtfully with relevant content and sharing one insight weekly over the next month to establish a consistent habit you can carry forward throughout the year. Consistency matters more than perfection. Taken together, these efforts can meaningfully expand a TPA’s centers of influence and reinforce their role as a trusted, collaborative partner. PC
Build the muscle now, document each step, and onboarding the next vendor (and the next 10) will be measurably faster and meaningfully safer. By Cam Sechrist
Retirement plan consultants are increasingly on the front line of cybersecurity vendor risk.
Whether you are vetting a recordkeeper, payroll integrator, document provider, or AI-powered participant engagement platform, the diligence you do today will likely be examined later, by clients and possibly by the Department of Labor.
The threat landscape makes the stakes concrete. Pre-built ransomware kits are sold and rented online, and large-scale software breaches in recent years have reached service providers across the retirement ecosystem. None of this is hypothetical.
The DOL’s Employee Benefits Security Administration (EBSA) issued cybersecurity guidance in April 2021 and reinforced it in September 2024, confirming it applies to all employee benefit plans and to every service provider in the chain. The bar has been raised, and “we asked for a SOC 2, and they sent one” is no longer a sufficient answer. What follows is an updated framework, focused on what too many reviewers miss: the exceptions buried inside a clean-looking report.
A SOC 2 (short for System and Organization Controls 2) is the most
common cybersecurity report a tech firm will offer you. The version they hand you first is rarely the one you most need. Insist on the following:
• A Type 2 report. A Type 1 report describes controls at a single point in time. A Type 2 tests whether those controls actually operated effectively over a sixto twelve-month period. A Type 1 alone is, at best, a starting place for an early-stage vendor.
• Recent and current coverage. Confirm the audit period ends within the last twelve months. If the gap between the report’s end date and your review exceeds three months, request a bridge letter (also called a gap letter), signed by management to confirm that nothing material has changed since.
• The right Trust Services Criteria. SOC 2 reports cover up to five categories: Security, Availability, Processing Integrity, Confidentiality, and Privacy. Many vendors test only Security, which is the lone required category. If the firm will host participant data, add Confidentiality; if it processes contributions or distributions, add Processing Integrity; if uptime is critical, add Availability.
• Scope alignment. Confirm in the system description that the
specific services you are buying, not just the vendor’s flagship product, fall within the audit boundary. Vendors commonly scope a SOC 2 to a single product line.
This is the most important shift in modern vendor diligence: a SOC 2 is not a pass/fail certification. It is an auditor’s opinion plus a list of tested controls and, often, exceptions: instances where the auditor found a control failure. A clean opinion can sit alongside multiple exceptions, and stopping at the opinion letter misses the most useful information in the report. Work through it in order: The opinion letter. An unqualified opinion is what you want. Qualified, adverse, or disclaimer opinions warrant a conversation. Confirm the auditor is an independent CPA firm, and specializes in technology audits, not just tax management. Subservice organizations. These are outside vendors the tech firm depends on, typically cloud providers like AWS, Azure, or Google Cloud. The report will say either carve-out (those providers excluded; get their reports separately) or inclusive (their controls tested here). Carve-out is the norm; plan to collect the underlying provider’s SOC 2 as well.
“A SOC 2 COVERS ONLY PART OF A FIRM’S OVERALL CONTROL ENVIRONMENT.
DOL’S BEST CYBERSECURITY PRACTICES SET OUT WHAT REGULATORS AND PLAN SPONSORS INCREASINGLY EXPECT, AND THEY GO FURTHER.”
Complementary User Entity Controls. These are the controls your firm must operate for the vendor’s controls to work: terminating user access promptly, reviewing exception reports, configuring single sign-on. They are obligations you accept by signing the contract. Confirm you can meet them.
The testing matrix and exceptions. This is where most reviewers stop too early. For each control, the report shows what was tested, the sample size, and whether exceptions were noted. Look specifically for:
• Access exceptions: terminated users not removed promptly, shared credentials, or missing multi-factor authentication on privileged accounts.
• Change management exceptions: production system changes pushed live without documented approval or testing.
• Backup and recovery exceptions: failed restoration tests or missing backup verification.
• Vendor management exceptions: gaps in the firm’s own oversight of its outside providers.
• Incident response exceptions: incidents not documented, escalation procedures not followed, or notification timelines missed.
Exceptions are not automatically disqualifying. What matters is the nature of the exception,
management’s written response, and whether the issue has been fixed. A single tester misclassification on a sample of forty differs meaningfully from systemic gaps. Document your conclusion either way. That file is what you will point to if asked how you evaluated the vendor.
A SOC 2 covers only part of a firm’s overall control environment. DOL’s best cybersecurity practices set out what regulators and plan sponsors increasingly expect, and they go further. During onboarding, also confirm:
• A written information security program built around a recognized framework (NIST CSF 2.0 and ISO 27001 are the most common cybersecurity guides) and reviewed annually by senior leadership.
• Phishing-resistant multifactor authentication for all administrative and remote access. Multi-factor authentication means logging in requires more than just a password. The current standard uses hardware security keys or authenticator apps; onetime codes sent by text message are increasingly intercepted or bypassed.
• Strong, current-standard encryption for data both as it moves between systems and as it sits in storage, including backups.
• Annual penetration testing: outside security professionals hired to actively try to break in. Ask for the executive summary and confirmation that important findings have been fixed.
• A written incident response plan with defined notification timelines for both plan sponsors and participants. Request a copy or a redacted summary.
• Business continuity and disaster recovery plans with targets for how quickly service can be restored and how much recent data could be lost, tested annually.
• Cybersecurity insurance with appropriate limits and read the exclusions. Ransomware payments, social engineering fraud, and business email compromise (where attackers impersonate executives or vendors to redirect payments) are commonly excluded or sublimited.
• Background checks for employees with access to plan data, plus a clear process for destroying participant data and offboarding when the relationship ends.
AI and machine learning. If the vendor uses AI tools that touch participant data (for service, recommendations, fraud detection, or back-office processing), ask whether
participant data is used to train models, and how the firm prevents models from leaking data or being manipulated by malicious inputs.
Deepfake-assisted impersonation. Voice cloning and synthetic video have made executive impersonation attacks materially more credible. Ask how the firm authenticates high-risk requests (wire changes, password resets, account takeovers) beyond simple voice verification.
Fourth-party and supplychain risk. Recent breaches at file-transfer and identity vendors showed that your vendor’s vendors matter. Ask how the firm tracks its outside software, learns about new vulnerabilities, and applies patches.
The DOL doesn’t tell you which vendor to pick or which specific control to demand. It calls for a thoughtful, repeatable process you can show your work on. A SOC 2 report sitting unread in a file folder is not that process. Reading the report, spotting the exceptions, asking the follow-up questions, and keeping the resulting file are.
Tech firms entering the retirement plan space generally welcome rigorous diligence; the firms that bristle at it tend to be the ones that warrant the closest look. Build the muscle now, document each step, and onboarding the next vendor (and the next 10) will be measurably faster
safer.
Tying contributions to key performance indicators is a major plus for employers and employees.
By Ted Benna
The primary goal of the first 401(k) savings plan I designed was to help middle-income employees save for retirement. The plan achieved this by turning many spenders into savers through payroll deductions. Millions of workers prioritized saving above all else.
The first 401(k)s were also easy for employers and employees to understand. There was only one type of plan; therefore, the decisions employers had to make were not complicated.
The early plans include only two investment options, and participants split the contributions into 25% multiples. Investment advisors and investment advice did not exist.
We now offer multiple 401(k) options for employers and unlimited investment choices for participants. In addition, 401(k) became the primary private retirement plan. Despite 401(k)s huge success, there are major gaps, including the following:
• Roughly half of the private workforce lacks an employersponsored retirement plan.
• A large share of middle- and low-paid employees lack funds to meet financial emergencies.
• Many lower-paid employees cannot afford to have money deducted from their paychecks when they do have employersponsored plans available to them.
There are several things that can be done to deal with these problems, including:
“THE EMPLOYER ACHIEVES SIGNIFICANT SAVINGS BY MAKING CONTRIBUTIONS INTO THE PLAN RATHER THAN PAYING CASH COMPENSATION. THE CONTRIBUTIONS ARE EXEMPT FROM FICA, UNEMPLOYMENT, AND WORKERS’ COMPENSATION PREMIUMS. ”
• State-mandated plans.
• Encouraging small employers that do not offer a plan to use the available tax credits to start one.
• Employers can adopt incentive plans to help fund financial emergencies.
I have created a new plan that enables employers to address these issues directly. It is a Section 401(a) incentive plan that is solely employer funded. Since the plan covers only non-highly compensated employees (NHCE), it is fully customizable.
The employer chooses which NHCEs are eligible and sets the requirements for incentive contributions.
The plan lets participants withdraw contributions for expenses such as car repairs or a new refrigerator. The employer set requirements for such withdrawals, including frequency. The employer can also be a gatekeeper approving the withdrawals.
The employer achieves significant savings by making contributions into the plan rather than paying cash compensation. The contributions are exempt from FICA, Unemployment, and Workers’ Compensation premiums. These savings typically are in the 15 to 20 percent range. As a result, the employer can save $150 to $200 for each $1,000 contributed to the plan rather than making cash payments.
Tying the contributions to key performance indicators (KPIs) is another major plus for employers. Improving performance should increase profits. The plan can help reduce employee financial stress, which should also increase productivity. Some
reduction in turnover is an additional potential benefit.
Here are actual situations where this can improve what employers offer:
• Tying new comparability plan contributions to KPIs rather than random allocations per participant.
• Allocating profit-sharing contributions using KPIs rather than an equal percentage of pay regardless of performance.
• Converting existing cash incentives and bonuses into plan contributions.
Implementing an incentive-based program for employers who have not yet adopted one is also a good idea. Here are some additional facts to consider:
• Such a plan will qualify for the state mandates.
• The plan will qualify for federal tax credits even if the employer has adopted a state-mandated payroll deduction IRA.
• The plan will provide additional benefits to help employees who contribute to a payroll deduction IRA.
• This type of contribution can be part of a 401(k) or a separate plan.
A system has been built for the plan I have been offering that enables participants to actively engage with their accounts. This gamification makes the plan much more interesting for the participants. It also enables employers to constantly remind participants of the KPIs they need to hit to receive contributions to the plan. PC
It’s rare for a compliance failure to turn into a win. But when it does, it’s usually because the right corrective path was chosen and carefully followed through. By Shannon Edwards and Theresa Conti
Every compliance administrator who has taken over an existing retirement plan knows the feeling: somewhere in those files, there may be a land mine waiting to go off.
It’s a little like a jack-in-the-box. You start reviewing documents, turning the handle—eligibility, amendments, notices—knowing something might pop out, but not when. And then suddenly, there it is—a mistake, or worse, a series of them, staring back at you.
Takeover plans are unpredictable. Some are clean. Others unravel quickly, revealing years of issues that were never fully understood, communicated, or corrected. Without strong oversight from a knowledgeable TPA and financial advisor, even well-intentioned plan sponsors can find themselves in serious compliance trouble.
The good news? Even the messiest situations can still be fixed, and sometimes, they can turn into real success stories.
That’s where the IRS Voluntary Correction Program (VCP), part of EPCRS, comes in. VCP gives plan sponsors a structured way to correct errors, often reduce penalties, and, importantly, gain audit protection. In the right situation,
it can transform what appears to be a disaster into a manageable and sometimes surprisingly favorable outcome.
We typically recommend VCP when errors exceed what can reasonably be corrected through self-correction. That might be because the correction cost under SCP is too high, the issue spans multiple years, or the correction method needed isn’t pre-approved. Often, these situations involve retroactive amendments. Sometimes those retroactive amendments appear to reduce benefits that participants were technically “promised.”
The case below is a perfect example of how a series of small missteps can snowball, and how VCP can ultimately provide a path forward.
The employer had several hundred employees and a high turnover rate. Their initial goal was straightforward: to allow a small group of non-highly compensated employees to enter the plan earlier than the standard eligibility requirements.
The Plan Sponsor wanted to allow non-highly compensated employees into the plan early. Because they were not highly compensated employees involved, there
“WHAT SEEMS LIKE A SIMPLE FIX FOR ONE GROUP CAN INADVERTENTLY EXPOSE THE ENTIRE PLAN. BE SURE TO CONSIDER ALL OPTIONS AVAILABLE, EVEN THOSE THAT MAY SEEM MORE CREATIVE THAN OTHERS.”
were targeted ways to accomplish that goal that would have avoided allowing everyone into the plan. These options were not considered or explored.
Instead, the plan was amended retroactively to grant immediate eligibility to all employees. That single decision opened the floodgates.
Suddenly, every employee was eligible, including many who had already missed being enrolled and now had missed deferral opportunities. The plan was now exposed to significant compliance failures, including missed deferral opportunities, potential employer contributions they were not prepared for, and the need to make up lost earnings on both.
The financial impact of correcting those failures using standard self-correction methods would have been overwhelming. And it didn’t stop there. The issue spanned multiple years, compounding the cost and complexity. As anyone who has worked through multi-year corrections knows, the numbers can escalate quickly and unpredictably.
Looking back, several breakdowns contributed to the situation. There was no comprehensive census review before the amendment was adopted. The plan sponsor didn’t fully understand the scope or consequences of the change being made to the eligibility requirements.
Service providers failed to communicate the implications clearly. And perhaps most critically, the issue went undiscovered for several years, allowing the problem to grow. By the time it was identified, self-correction was no longer a practical option.
VCP was the clear path forward. The errors were significant, affected a large population, and required a correction approach, specifically, a retroactive amendment, that fell outside standard self-correction methods. The hope was that the IRS would allow a more reasonable correction than the costly alternatives.
The submission was made, and as part of its review, the IRS focused heavily on one key question: what had been communicated to participants? That question changed everything.
It turned out participants had never been notified of the eligibility change. There was no updated Summary Plan Description, no Summary of Material Modifications, no safe harbor notice, and no enrollment or eligibility communications.
In other words, while the plan document had been amended, the change had never been meaningfully communicated.
Therefore, the participants had no expectation of receiving a benefit. Because of that, the IRS concluded that participants had not been harmed. They had not been told they were eligible, had not expected to participate, and therefore had not lost a benefit they reasonably believed they were entitled to.
The result was unexpected but extremely favorable. The IRS allowed the issue to be resolved through a retroactive amendment, with no requirement for costly corrective contributions. What could have been a financially devastating situation became a success story instead.
There are several important takeaways from this experience.
First, always review a complete and accurate census before making plan changes. Eligibility decisions, in particular, can have far-reaching consequences and should be carefully considered before being enacted.
Second, think through all potential outcomes before adopting an amendment. What seems like a simple fix for one group can inadvertently expose the entire plan. Be sure to consider all options available, even those that may seem more creative than others.
Third, communication matters both in what is said and what is documented. Plan sponsors need to understand changes fully, and participants need to be properly informed when those changes affect their rights or benefits.
Fourth, ongoing plan reviews are critical. Annual checkins that align plan operations with workforce changes and business goals can catch issues before they escalate.
Finally, document everything. What is communicated to participants and how it’s communicated can ultimately determine how the IRS evaluates a situation.
This case could have resulted in significant corrective contributions, penalties, and operational disruption. Instead, because the plan sponsor and advisor chose to proactively address the issue through VCP, and because the IRS evaluated the actual participant impact, the outcome was far more manageable.
It’s rare for a compliance failure to turn into a win. But when it does, it’s usually because the right corrective path was chosen and carefully followed through. PC
It represents a meaningful step forward in how retirement plan professionals access and engage with technical information. By Robert Richter
Retirement plan professionals are no strangers to complexity. From nuanced regulatory distinctions to plan-specific provisions, even seemingly straightforward questions can require layered analysis. That’s where Ask ERISA, an upcoming AI-powered chatbot, is set to make a meaningful impact — by delivering faster access to trusted and accurate answers to users.
We have spent considerable time developing Ask ERISA to address two key concerns about the use of AI in this space. These concerns are particularly significant in a field where incorrect answers can lead to adverse tax consequences for both employers and employees. We concluded that a customized AI solution was necessary to meet these challenges.
“THESE ARE THE KINDS OF NUANCED, MULTI-FACTOR SCENARIOS THAT ASK ERISA IS DESIGNED TO HANDLE. BY SURFACING RELEVANT CITATIONS AND PRESENTING THE INFORMATION IN A STRUCTURED, UNDERSTANDABLE WAY, THE PLATFORM HELPS USERS NAVIGATE COMPLEXITY WITHOUT OVERSIMPLIFYING IT.”
The first concern is the potential loss of human judgment in AI-generated responses. Ask ERISA is designed with guardrails, including limitations on consultative or advisorytype questions.
For example, users will not be able to input employerspecific data and request recommendations for optimal plan design to maximize owner benefits. This ensures the tool supports—not replaces—professional expertise.
The second concern is the reliability of AI-generated answers. Off-the-shelf AI tools can and do produce incorrect results. For instance, when asked whether a Roth IRA can be rolled over into a 401(k) plan, the correct answer is no — yet at least one widely used AI platform has incorrectly answered the question as yes.
Ask ERISA addresses this issue by grounding every response in the ERISA Outline Book (EOB), which serves as its core knowledge base. Each answer is directly tied to this source, ensuring consistency and verifiability. Rather than offering generalized conclusions, the platform reflects the reality that retirement plan questions often depend on specific facts, plan provisions, and regulatory frameworks.
Using the EOB also allows Ask ERISA to stay current with changes in the law. This is a critical advantage over generalized AI systems trained on large but static datasets. In areas like retirement law—where rules can evolve through legislation—timeliness is essential.
Consider the Roth IRA rollover question again. If you’ve been following our Government Affairs Committee’s activities, you know we hope the answer will change in the future (through legislation) to yes.
Open-source AI tools may lag in adapting to such changes, but Ask ERISA can incorporate updates as soon as they are reflected in the EOB.
Many ASPPA members enjoy diving into technical details. Take, for example, the question: Can a hardship distribution be taken for car repairs?
A typical AI tool might respond with a simple “no” or “usually no.” However, the correct answer depends heavily on context. Is the question coming from a participant or an employer? What type of plan is involved?
From a participant’s perspective, the answer generally depends on the terms of the plan—unless the plan is a 403(b) annuity, in which case annuity contract provisions may affect the answer.
If one is asking, as an employer or advisor, what a plan “could” permit under the law, the answer shifts and can be quite lengthy. Factors to consider include the type of plan and which accounts one wants to make available for distribution. For example, nonelective contributions in custodial 403(b) plans are subject to more restrictive inservice distribution rules than those in 401(k) plans. And restricted accounts (such as deferral accounts) usually, but are not required to, use the safe harbor events, which do not include automobile repair expenses.
These are the kinds of nuanced, multi-factor scenarios that Ask ERISA is designed to handle. By surfacing relevant citations and presenting the information in a structured, understandable way, the platform helps users navigate complexity without oversimplifying it.
Ask ERISA will be available through both individual and enterprise subscriptions, with a launch expected this summer. It represents a meaningful step forward in how retirement plan professionals access and engage with technical information—combining speed, clarity, and reliability while remaining firmly grounded in trusted source material. PC
October 18–21, 2026
San Antonio, TX