Nevin Adams - CARES Act & 401k

[0:00] JD: Changing the retirement plan industry one shitty webinar at a time. [0:08] Justin: Brandon, are you doing an intro? [0:12] JD: Is that it? That was fine. All right, welcome to another episode of the Retireholics Sheltering in place. We got a special guest with us, someone sitting on the virtual Retireholics couch and a very distinguished gentleman. I can't believe that he continues to join us with these shows, but we got Nevin Adams from the American Retirement association, frickin aspa, Frickin napa, frickin psca. Is that Dynamo Mall? Is that right? [0:46] Nevin Adams: No, you left off Asea and NTSA or 5. [0:51] JD: I think you just made those two up. I've never heard of those before. When I think of the ARA, Aspa, Mr. Brian Graff yourself in past years. And when I go to a conference and they say, oh, they're going to give us the DC updates, right, we're going to get the Washington updates. I'm usually like, oh God, who wants to hear that crap? You know, I'm not, I'm not that interested. But guess what? When the world goes to crap and there's like a pandemic going on, I'm very interested in what's happening in Washington D.C. so you finally have my full attention, by the way. [1:26] Nevin Adams: Finally. All it took was a pandemic, huh? [1:29] JD: And I want to take this opportunity to say and thank you, man, for everything that you guys are doing up there because it's so freaking crucial. And we're all out here in the world just hanging on it waiting for you to get these things done. And you did such a phenomenal job. And so thank you, thank you, thank you, appreciate it. But now you guys get this legislation put through. The President signs it on Friday. I wake up Monday morning as a third party administrator and I'm like, holy cow, like this is real. Now I've got to start to put it in place, change operations, train the staff. You know, ask myself, are the record keepers prepped? You know, how is this all gonna funnel through? And that's what I've been doing for the last 48 hours. Can you give us a bit of your perspective on how the heck you guys got that thing through so fast and are you happy with it and. Or do you see some kinks or some things that you're concerned with? [2:32] Nevin Adams: Yeah, I think for this first round is a pretty amazing package in terms of helping participants get better access to what we all know is like their only source of set aside money. I mean, this is where America saves is in their retirement plans at work. And when you're in a situation where your job is up for grabs or maybe even in jeopardy, where you've got illnesses and health issues and things like that, you know, there's a lot in this package to help people out. Includes things like expanding some of the HSA stuff and there's even something in there to help student loan debt repayments. So it's a pretty awesome package. But mostly it helps individuals. And the people that we're still worried about, significantly worried about still, are the employers, particularly small businesses, who are working with these plans. Aside from all the extra work, and let's not downplay it, any helping people get access to their retirement money is a lot of work. You guys know that you're part of that work trying to get that information and that money out to participants as soon as you can. But right behind that is the line of defense. That's the plan sponsors who've made the financial and the hardship ability to actually have the plan. [4:00] JD: Yeah, we're super worried for those companies. Obviously, when we have to shelter in place and these doors are shut for these companies, it's really scary to think about how long they can survive. I know it's not really retirement plan legislation, but I think that the payroll protection, the two and a half months of payroll is really interesting. And if they can get that money out to people quickly, I think that'll do a lot of good to help the employer bridge this gap. But I think what you're referring to is, and I want to ask you, if this is in the pipeline, are there new stuff coming that's going to help them maybe not be committed to a match or they can really get rid of that safe harbor really quickly or what kind of things do you think are in the pipeline, if any? [4:53] Nevin Adams: No, there are definitely things in the pipeline and we're working both on the Hill and with the regulatory agencies to try and get some of that, get some of that relief for folks. We've been through financial crises before. There was some after the tech bubble, and in 2003, we had it in after the financial crisis in 2008, 2009, we saw a lot of employers then, particularly larger employers, kind of step up, notably in the headlines and suspend their matches. For the very most part, it was just a suspension, it was just a short term. And as soon as business got back to normal, the matches came back. So we're hoping that that holds true again. But the problem, particularly with a lot of safe harbor plans that are out there, 401k safe harbor plans Is is the commitment on the employer's part to make that match to individuals because they make that safe harbor match. They're not subject to the traditional non discrimination test because they wouldn't have a problem with those anyway based on the match and the contribution of the vesting. But also on the top heavy testing, which I'm assuming people are tuning into this, are familiar with both of those things. It's been a little educational effort with the media, as you might imagine, who are not as familiar with those things, but trying to get some relief for that. There's notice requirements. When you think about it, if you're going to suspend your safe harbor match, you need to give participants a certain window of time to let them know that that's going on. Well, if everybody's working from home, how do you produce those hard copies? How do you produce those notices and get them out to people? So there are some logistics, some real logistical issues that make business as usual completely impractical. But beyond that, under the circumstances, we really think it's important. We want employers not to take the drastic step of terminating these plans and doing away with them. So we feel like we've really got to give them some breathing room to do that in terms of whether it's a suspension of the match or just some breathing room in terms of the timing on some of this stuff. And we have corresponded and met with both the irs, the dol, as well as people on the Hill to try and deal with some of this stuff, you know, but they're working from home too. So again, this is, I mean, this is a rough slog, but honestly, guys, this is one of the reasons. It's one of the reasons why I'm part of the American Retirement Association. It's one of the reasons why the members that we have are so supportive because we are here and we're reasonably effective at getting some of this stuff done and bringing those needs of people on the front line, you know, giving voice to those concerns. So fingers crossed. We've got a long road ahead of us, but we're not done. [7:43] Justin: I was going to ask, and it's interesting the way you finished up there. Has the ARA ever felt more important than you do right now? Because you truly are taking the concerns of the general population to the people who are going to make these decisions. And I feel like we're all sitting back going, just some of the comments you made and I'm sitting here taking notes and going, that's what we've been thinking. And you guys are already on the front line, communicating that to the people that are making these decisions that are going to change these laws or give us a little relief. So have you ever felt more important than you do now? [8:19] Nevin Adams: Let's not kid ourselves. We're not putting our lives at jeopardy by virtue of what we're doing. But hopefully what we're doing will be helpful to those who lives either way are in jeopardy or who are putting their lives in jeopardy to help others. It's the way we can make a difference and the way we can contribute. We're trying, but ultimately, it's all about trying to make sure that America's got a decent retirement. [8:46] JD: Justin, can I ask you. I'm not clicking on it, but I see tons of chats going down. Is there any question you want to pull from the audience there? [8:56] Justin: No, just everyone sharing what they're drinking tonight or lack of drinking because they are out of beer. I'm sure some of us are in that. [9:04] JD: All right. It sounds like we've been a very good influence on the industry as a whole. Well, Nevin, we've had you on here quite a while. We really appreciate it. We're gonna kind of wrap it up. But I want to. [9:17] Nevin Adams: I got one more thing. [9:18] JD: Oh, please, beautiful. What's he got? [9:22] Justin: Nevin Stripping. [9:25] JD: No beer for Nevin. [9:29] Justin: It's crossed out now. He's at home. [9:32] JD: Yes. I'm glad that you still have that shirt. All right, I'm out of here. I'm going to go walk the dogs.