Expert Opinion

With the passage of this landmark legislation, significant administrative guidance on changes to retirement plans will be forthcoming from the IRS and the DOL, but here is a preliminary summary of the most relevant changes.

The new regulation opens the door for employers to adopt (or convert their existing cash balance plans) to market-return cash balance plans, without a minimum fixed rate, and with the opportunity to have a scale of pay credits that materially increase by age or service.

This new legislation allows employer-sponsored retirement plans to have an emergency savings account within them, effective after December 31, 2023.

Now, both employers and plan sponsors will need to make some technological adjustments in order to expand automatic enrollment, speed up deployments and ensure compliance.

There is a looming retirement-readiness problem that is not going away: Employers need to motivate employees to take action and participate in their 401(k) plan (and not leave "free money" on the table).

Convertible benefits can help CHROs accomplish this goal by reallocating resources that have already been budgeted to personalized forms of support for their employees.