NAPA 401(k) Summit 2024: 3 Key Insights for Recordkeepers

April 16, 2024
0 min read
A cover image with Sean Kelly's headshot. Sean Kelly, former VP at Goldman Sachs RIA, recaps the 2024 NAPA 401(k) Summit in this blog.
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Retirement industry advisor Sean Kelly shares his key takeaways from the 2024 NAPA 401(k) Summit, including valuable insights for 401(k) recordkeepers.

Sean Kelly is a seasoned retirement executive with more than 25 years of experience in the industry. Throughout his career, Sean has influenced every angle of 401(k) management, from plan administration to contribution oversight. He has served as VP, Head of Sales at Goldman Sachs Advisor Services, VP of Retirement Services at Fulton Bank, and Director of Retirement Solutions at WisdomTree. Today, Sean is a Senior Growth Partner for the Pension Resource Institute and a retirement industry consultant. 

The biggest retirement advisors conference of the year took over Nashville last week, with more than 2,500 industry insiders descending on the Music City for three days of learning and networking. 

I joined the Finch team at the NAPA 401(k) Summit this year, where we met with dozens of advisors and sat in on the sessions and workshops they attended. We brought back plenty of insights and anecdotes about what advisors are worried about, what they’re looking for in the recordkeepers they work with, and how they’re thinking about the future of retirement. 

Here are my three biggest takeaways from NAPA 2024.

1. SECURE 2.0 is just the beginning: more legislation is on the way

It’s no surprise that the latest federal legislation affecting the retirement industry was front and center at NAPA this year—after all, SECURE 2.0 takes full effect in a few weeks. But it was also clear that SECURE was only the beginning. 

New legislation that would amend SECURE 2.0 is already in the works—both to close the loophole that could have eliminated catch-up contributions and to expand startup tax credits to employers joining existing plans. On top of that, the Automatic IRA Act of 2024, introduced as a bill in February, would require employers with 10 or more employees that don’t sponsor a retirement plan to automatically enroll employees in IRAs or other automatic contribution plans.

The bottom line is that we’re poised to see continued changes to plan requirements over the next several years that have the potential to impact compliance and eligibility rules, affecting not just advisors, but recordkeepers and TPAs as well. All retirement stakeholders need to ensure they’re prepared to adapt—not just to adhere to SECURE 2.0, but to navigate a period of continuous change over the next decade. 

2. PEPs and small employer plans are a volume play

Several of the sessions at this year’s conference focused on Pooled Employer Plans (PEPs), the new plan structure introduced by SECURE Act 2.0. Across the board, attendees seemed to agree on two things: 

  1. Micro- and small-business plans are poised to flood the retirement industry in the coming years, and 
  2. Figuring out how advisors can maintain margin from these plans is a top priority. 

PEPs were created to encourage small and mid-sized businesses to offer retirement benefits by allowing them to pool their plans, offsetting the plan administration costs; but with smaller asset pools to manage, advisors voiced concerns about how best to charge sponsors.

At least one session panelist offered a new perspective to advisors struggling with small-sponsor plans: it’s a volume play. He suggested that advisors look not at the incremental gains from each plan, but rather the benefits of amassing a large portfolio of small plans, and encouraged the audience to “do your part” to keep the retirement industry private. 

So, how does this matter to recordkeepers? In order to take on a large number of PEPs and other small plans, advisors will seek to minimize their management responsibilities with these plans. That means they’ll prefer to work with recordkeepers that reduce the advisor’s involvement—both by easing the burden on the sponsor and by providing hassle-free access to sponsors’ data. 

Simply put, as advisors look for ways to profit off of small plans, they’ll increasingly begin referring sponsors to recordkeepers that automate more of the work of plan administration.

3. Advisors are hungry for payroll integrations

The need for better payroll integrations was a common theme I heard across the exhibition floor and in breakout sessions throughout the conference. All of these conversations boiled down to one of two key needs among advisors:

  1. The need for better access to sponsor data from recordkeepers — It was the gripe heard ‘round the Music City Center: advisors are tired of struggling to get the data they need from recordkeepers. 

Most of the time, it’s not the recordkeeper holding critical information behind lock and key, but rather a compounding problem—the recordkeepers are also struggling to collect the data they need from sponsors. Without reliable payroll integrations, recordkeepers spend countless hours going back and forth with the sponsors and validating and standardizing data, which makes it difficult to share clean, timely data with advisors. 

  1. The drive to offer a better sponsor experience — At the end of the day, the advisor is an advocate for the sponsor—so improving their sponsors’ experience was a core goal for many of the advisors at NAPA. 

The advisors I spoke with shared that one of their biggest challenges is finding recordkeepers that integrate with their sponsors’ existing payroll providers, since sponsors are typically adamant about keeping their existing payroll solution. 

Advisors seemed agnostic to the nuts and bolts of how the payroll integrations worked or whether they were built in-house or powered by a third party, as long as the flow of data from sponsor to recordkeeper was fast and accurate. 

NAPA 401(k) and the 2024 state of retirement

This year’s conference focused heavily on the three major trends shaping the future of retirement, all of which are primarily being driven by new legislation: changes to compliance regulations, a renewed focus on the sponsor experience, and the increasing adoption of automation. 

Finch dives into each of these trends—and offers tips for how recordkeepers can best adapt—in its latest white paper, The Changing Retirement Landscape: How 401(k) Recordkeepers Can Thrive Under SECURE Act 2.0

And if you’re attending the Broadridge 360 Advisor Conference May 19-21, come see me! Find me ahead of time on Linkedin

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