Kleeman: Hey everyone. Thanks for joining today's webinar. There are 2.0 financial planning considerations for advisors. Before we kick off, I want to just a few housekeeping items out of the way. At the bottom of your screen are multiple application engagement widgets, which you can use. All of these can be moved, resized, minimized. So please feel free to customize your desktop space any way you see fit to maximize your experience. Additionally, today's session has been accepted for one hour of key credit by app by 360 IWC and a CFP board designations to receive continuing ads for this webinar. It's important that you join the webinar using the email address associated with your F 360 training and designations account, and using the link that was sent directly to your email. You must be in attendance for at least 50 minutes in order to it, in order to qualify for CV credit. For those who do qualify for CE credit, there's no additional action required of your part.

You'll get an email confirmation from us as soon as you receive your process. If you have any questions during the webcast, submit them through the Q&A widget and I'm going to encourage everyone to ask questions as we go through this material. Please, let's make this interactive. If you have questions, we'd be happy to answer them throughout the presentation. Slides are behind pushing F5 and a keyboard will refresh the page in an on demand version of this webcast will be available approximately one day after and can be accessed using the same link that you had earlier. You also find some resources on your display right now, including the presentation that we have here. So please feel free to download or download those as well. So as a session. My name is Michael Clements. I am senior director of Strategy and Broadridge asked if we focused on our retirement and workplace businesses. So it's really focusing on our advisor solution offerings as well as our trusted custody business and trading platform. Very excited to have two great speakers with us today to talk about these topics.

The first is Alicia Rich. Alicia is a financial services executive with over 25 years of experience in the industry. Beginning her career as an investment associate, she helps families with wealth, retirement and education planning. And eventually, she migrated to a corporate role where at least two of my teams are designing digital tools that would ultimately support how advisors, their staff and clients engage and manage everyday finances. Alicia's current role is at Broadridge as my colleague. I'd like to introduce her sometimes a big deal on the wealth side, but more officially. She's head of our digital client and advisor enablement. So Alicia is responsible for developing all of our digital capabilities and experiences across the wealth organization to help enable advisor productivity, deliver actionable data insights and extends those experiences to your clients through collaboration and personalization. So excited to hear from Alicia today. Also joining us is Bonnie Frankel. Bonnie is the chief solutions officer of Endeavor Retirement, a consulting firm dedicated to solving problems for plan sponsors, advisors and service providers in the retirement plans Industry bodies. Unique Experience as an Arizona attorney and advisor helps her bring governance solutions to the day to day issues that are an inevitable part of running a successful retirement plan. Bonnie is a thought leader in the industry on retirement planning issues quoted in publications such as the Wall Street Journal, Investor News Ignites, and many others. I'm an active member of the American Retirement Association. She served in various leadership roles there, very active in industry. You know, a member of Women in Pensions Network, Women in Financial Services, and a colleague that I work with a lot in retirement income and the Roberts Primary Consortium. So excited to have both Alicia and Bonnie join us today. So I really dive into this topic.

So as you kind of kick off here, some of the things that we want to cover today as it relates to secure or to not always, it's helping everyone understand the intersection between some of these provisions in the new secured 2.0 act and how that that intersects with financial planning that you might need to do with your clients. When I identify opportunities for advisors to leverage these provisions to provide additional value to your wealth, clients evaluate practical guidance for how to engage and communicate with individual investor clients, and ultimately to help leverage partners to maximize value for your clients, not just secure, but beyond that as well. So hopefully over the next, you know, 56 minutes, we can help answer some of these questions, provide some additional insights and help expand and grow your practice. So to level say a little bit about kind of secured 2.0 in the current environment that we're seeing here. So really secured 2.0 past December of last year. Most important retirement legislation we've seen as a result, which is, you know, 50 years ago. And it's incredibly important because of the retirement crisis that exists in this country today. According to Pew, an estimated 56 million workers don't have any type of retirement plan savings at work. And that's where the bulk of people are doing their retirement savings. This low retirement savings contributes to approximately $11 trillion shortfall in retirement savings. And so really, action needs to be taken to help get Americans in a position where they can retire and have the financial independence that they need to be able to continue on in their lives. So we're seeing in a couple of different ways that that the governments are working to help solve this. The first is on the federal side, and primarily that's through the direct security 1.0 and now more recently secured to date. And that is really, you know, kind of more of the carrot approach, right.

When it relates to carrot and stick. So trying to encourage people to increase the availability of retirement plans through a number of tax credits, through making certain aspects of retirement plans easier to set up for small businesses, increasing participation in retirement plans. You'll see a number of provisions to help kind of encourage that and flexibility of retirement savings. People who are more likely to contribute to retirement plans if they've got more ability to, and a more ability to get money out when they need it. And then on the more basic side of the of the approach is the state response. So individual states are beginning to mandate retirement plans. Their employers don't have them already. So a number of states have already implemented state IRAs. A number have enacted plans but haven't implemented yet. And many more are proposing legislation in their Congress right now. So, you know, we're going to continue to see traction on this stuff. And it is it's very important for the advisor community to really take advantage of this. You know, advisors, both retirement plan focused advisors and wealth focused advisors and hybrid advisors are really in a great position here to capitalize on security, you know, in this legislation to do two things. One is kind of for the greater good, right? We're going to be helping people save for their future, which is just important. And it's also really, you know, from a business perspective, a great opportunity for each of you to grow your business and gain more share there. You know, looking at the registration list for today's webinar, we have a really great cross-section of folks in attendance, some who are retirement plans focused almost exclusively, many who are wealth focused, and a large number who kind of have a have a toe in both pools. Right. And do both retirement and wealth. And we want to make sure we're covering that today.

Again, a really great opportunity here. You know, today there's around 656,000 retirement plans in the United States. And many estimates that kind of general consensus says that over the next five or so years, there may be an additional 600,000 new plants, 62 million new participants and 7 trillion new assets in retirement plans. And, you know, if you're retirement focused, that's great, right? Huge new pot available for us to target. If you're more on the well focused side, you know, what is what does that mean for me? You know, again, retirement plans, workplace saving plans, particular are really kind of an entry level for getting people to start saving and start thinking about their financial wellness. So a ton of opportunity there as well. So, you know, it's kind of three key things I want to call out for why it's important to embrace some of these startup plan opportunities. And it's around the accelerated growth which I've touched on before, right? New plans being set up and those plans are going to grow faster than they have in the past, thanks to new features of auto enrollment and auto escalation.

There's also a ton of new cross-sell opportunities. Again, a lot of cross collaboration between the retirement side and the wealth. So there's a potential for the retirement focused advisor to offer wealth services to new business executives. And on the other side, there's an opportunity for the wealth focused advisor to sell retirement plan services to small business owners or business owners of any size, really. And the third key item I'll call out is kind of a defensive play, right? There's a ton of opportunity here, but we also need to make sure we're being defensive and maintaining what we have. You know, if you're a wealth advisor that doesn't really dabble in the retirement plan space at all, you know, all of these small businesses are going to be setting up retirement plans. And if you're not in that space, they're going to work with the retirement plan focused advisor. And when that goes well, the retirement plan, a focused advisor, probably going to try to take that wealth business from that CEO or that small business owner. And that same holds true on the other side. The retirement plan focused advisor needs to be able to to sell wealth services to that small business owner as well, because the wealth advisors are starting to get into the retirement plan space. So a ton of reason to kind of dive in right away and get engaged.

Bonnie: Kleeman, I might jump in just to make, you know, kind of an exclamation point on what you were saying, because I think this line highlights something so interesting to me. As you were saying, as we looked at the registration list for today, I think historically I would see that you could really be a retirement plan specialist or you could really just stay on the wealth management side of the business and you started to see. This was a secure one, but security seemed to really put like the exclamation point on it for me, that you can't just be, hey, I'm just this retirement plan specialist and I'm just going to stay in the boardroom, but I'm not going to go over to the break room side of things, so to speak. You know, I'm just going to do one or the other. To me, you really can't even have the conversation in the boardroom, so to speak, as the retirement plan specialist. If you don't understand some of these just basic financial planning concepts of how that's impacting even the decisions that have to be made for the Retirement Plan Committee, you really can't just say, Well, we only give advice to the Retirement Plan Committee as a fiduciary and we don't need to know any of these financial planning things because they're now becoming so intertwined as to how you should give advice or how you would even help the settlor to make those decisions of are we going to do certain things, and how does that really impact the greater good of the organization, the Retirement Planning Committee's.

Alicia: Decisions and how that.

Bonnie: Flows down to the participants? So I think just more and more of their intersected and it goes both ways, as I know Alicia is going to talk.

Alicia: About as well.

Kleeman: Yeah, really great call out Bonnie, I couldn't agree more. I think we've been seeing the convergence of retirement and wealth coming, and this is absolutely accelerated to a to a whole new debate. And that base level knowledge is going to be critical. And then also, you know, not everybody can be an expert in everything. And we'll definitely touch on later in this webinar. Right. How you can partner with the right individuals, get the right tools to make sure that you're covering the wide range without you yourself having to suddenly all of a sudden know everything about a different side of the business that you didn't know before. So just kind of again, considering.

Bonnie: Just like we talked about before, like some of us don't do math.

Kleeman: Absolutely. Absolutely. So kind of continuing on a little bit with that theme, right, about how secure to not always change in the landscape for the advisors. Right. Just a couple of stats we want to kind of call out here. You know, 30% of high net worth clients are thinking about switching to a new advisor. Right. So that's a decent number of folks right there. The second most stated reason for changing advisors is a lack of communication. So there's a lot of changes coming out in the retirement plan side of the world today and individuals need to know what's going on and communication is the key. But you know, again, as we've been trending a number of years now into more customization and more personalization, that's going to continue to be key here, right? You know, Blanket email's not going to do the trick. You have to tailor your message. You have to personalize your message in order to capture the audience.

And then, you know, secure provisions provide. Tailored and personalized communications and engage with families and clients across the entire rich, across the entire spectrum. So everything from that wealth accumulation phase to those currently in retirement and everything in between. So again, communication is going to be key. And in order to communicate to your clients, you know, the best ways for them to take advantage of some of these new secure provisions, the best ways to get themselves up for a successful financial future is going to be making sure that we understand some of these key provisions and then then we can communicate to them. So I think maybe that won't be a good time to dive into some of those provisions from secure that really have some kind of key financial planning impacts. And we think we can kind of go from there. So, Bonnie, Alicia, should you want to maybe cover a few kind of key categories of provision here?

Bonnie: Absolutely. And I think, as mentioned, we're not going to cover every single provision of secure as we've talked about before on several of these webinars. We'd be here all day if we covered all 92 provisions of secure, and that wouldn't be a very engaging webinar. But we do hope that you'll put some comments or questions in the Q&A panel and we'll definitely try to cover the things that are important to those on the webinar. We do have what we consider to be four key provisions that we want to make sure we cover today and we'll discuss those, and I'll take some of the kind of what is the actual provision, and then I'll hand it over to Alicia to talk a little bit more about kind of, you know, who is that target audience and what's the message that you could.

Alicia: Use to.

Bonnie: Really tailor something. As you know, Clingan was just saying it's all about how do you retain business and how do you do so for those clients that they might be looking for a new advisor and you don't even know it, but by using some word custom communications, you will be able to read, help retain that business and probably win new business. So we want to really think about.

Alicia: What.

Bonnie: We think. Think about the blacklist. How do we start to think about within those areas? What are the ones that are most impactful on the financial planning side? And so a few of those relate to things like the 529 provision. So I think some of us would agree that on the 529 side, this was really one of the bigger surprises. And so certainly welcome, you know, Michael or Alicia if you have different thoughts. But I would say the 529 provision was one of the bigger surprises that we got out of secure 2.0. And it really is it is a bigger benefit of that 529 creation, but it has to come with those guardrails as well. So this is a provision that is active as a11 2024 where it's for beneficiaries of 529 college savings accounts. You're permitted to rollover up to 35,000 over the course of your lifetime from any 529 account. But it's going to come with certain limitations as well. So I think I'll go ahead and hand that over to a we should talk a little bit more about the target audience and messaging and then we can come back to some of those limitations.

Alicia: Thanks, Bonnie. So when I think about the target audience, I kind of put them into three different groups. First, if you think about your 529 accounts that are just about approaching 15 years being established. So for the parent, grandparent or a 529 holder, you want to reach out to them to start talking to them about what this provision could mean and the opportunity that you could move something for the beneficiary into a possible retirement nest egg. Now, like Bonnie said, there are some guardrails. You can only make the contributions that are eligible for your Roth contribution limits. So it could take five or six years for you to finally make the full conversion over. But it gives you an opportunity to talk to the beneficiary about what a diverse investment options might be available. And how else you can start looking at funding your potential retirement with these funds. Nat conversations I'd have when I was working in the front office is parents or grandparents who might be concerned about boomer funding A 529. It's sometimes, you know, you start to plan early, start to fund early, and you think, do I even know if my child is going to choose the college path?

So this, along with the strategy of possibly changing a beneficiary on the 529, makes it a little bit more stable of an option. For somebody college planning. And then the third audience is parents or grandparents with an infant or a toddler who might not have started saving for that. I think what you can approach people with here is the earlier you start, the sooner you can exercise the conversion strategy and maximize that overall opportunity. And the one thing that we do know about Gen Z investors who are typically the beneficiaries we'd be targeting at this point, Gen Y, Gen Z is that they rely on recommendations from parents and family for most of their financial decisions. And so when approaching these conversations, it's good to bring in the beneficiary with the parents or the grandparents, whoever is the funder of the account, to talk through the different options, let them understand what the potential opportunities might be for them. And again, focus on some of the diversity of investment options. Gen Y, Gen Z are also very interested in things like ESG impact investing, which is sometimes limited in a 529 proper account. So I think, Bonnie, we can go next to the second provision.

Kleeman: And actually, actually, can we go back real quick? There's a couple of questions coming in with Jack Nicholson to just clarify a couple of things. So really good question. So please, everyone, keep them coming. One question we got is that the Roth IRA that you're rolling into? Is that for the beneficiary, the 529 or the actual Roth IRA owner or the 529 donor?

Alicia: It's for the beneficiary. Right. So it would be for the beneficiary. And again, I think 2010 has to be open for at least 15 years. So it's not like you can open a Roth today and start making that conversion. So it has to be open for 15 years. And then the contribution limits are the limits that you can contribute to the Roth. So you can only convert up to about 6500 if that's the max amount that you can contribute to the rock.

Kleeman: Great. Great. Thanks for the clarification, Alicia.

Alicia: Absolutely.

Kleeman: All right, Now, would we like to move on to student loan matching? Bonnie, do you want to go over some of the key provision facts related to student loans and secure?

Bonnie: Yes. Happy to chime in on the student loan matching provision. So we should thanks for handling that question on the Roth by 29 component. So student loan matching provisions, this is a provision that I think can be a great financial planning opportunity. But I think the one big key caveat we have to put out front is that this is only going to apply if the set law of the retirement plan or the plan for this year has added the student loan provision to the plan. So I think that's a big thing we just say right upfront is that we can have this, but only if it's been added to the plan. So first and foremost, I think the thing that we want to be thinking about is this becomes effective starting one of 2024. So this would be the thing that if you are a retirement planning advisor, you'd want to be talking about this now for implementation in the coming year. And I think one of the things to also be thinking about is how you'd be having those conversations as it relates to the retirement plan, the vendor or the record keeper as well, because I think that's one of the things and probably Alicia and Michael, you have some thoughts on this as well as how are these retirement plan reference keepers handling this provision? So what is the provision itself, though?

This is a provision that allows plan sponsors to make a matching contribution on behalf of participants who are making their student loan repayments. So the whole thought process behind this is we have some participants feel they have been making their student loan payments and instead of contributing to the retirement plan, they're so bogged down with student loan debt that they're not contributing to the plan. So this is the idea that for those participants, if they're going to be making their student loan repayments, the employer can still be able to give them the match when they're making their student loan repayments. So I think one of the key things that I think is important about this provision is that it does allow the employee to self-certify that the loan payment has been made. So I think that's one of the concerns that came after there was a private letter ruling a few years ago, was that, well, wait a second, you know, how are we actually going to know if someone has made their student loan repayment? How would an employer actually know that? And so there is a self-certification component of this. We could get into a couple of the other details on this, but maybe a little handed over to you. And then we can always circle back to questions.

Alicia: Sure. Great. So this is an interesting one. I think, you know, as Bonnie was saying, there's a lot of participants who are choosing not to fund their retirement because they're so strapped with debt. When you look at which generations have the most debt. Gen Xers, we are responsible for 40% of college student debt. And that is in part because of our own college education as well as loans for our children. So it's not just a conversation that you would have with parents of recent grads or with a younger generation. The Xers are also out there and also probably very interested in this. What if their plans adopted? So like Bonnie said, it's optional. Not all plans have to adopt it, but we would encourage you to reach out to clients that you know that might be concerned about it and have them have conversations with their benefit service providers. So let them know that they have interest in this provision. You could also draft a sample email for some of your clients to give them some talking points of how they can address the conversation, just to let them let their employer know that this is something that would be entrusted to them and for their client retirement. An adviser is a potential way for people to either retain or to attract talent. 66% of employees under 40 have some type of student loan debt, and one in three millennials actually believe their employer should be helping them repay it. So if you apply this to a plan, use it more as a talent play and use it as a financial wellness component. Financial stress is probably blue. One of the activity in absenteeism. And so this could also be something that that helps people get a little bit more comfortable with the services that their firm is providing.

Kleeman: That's a really great point, Alicia. I think you know something that we've seen, I don't we're not going to touch a ton on here in this webinar, but provide secure and incentivizing participants to get into the retirement plans. And I think you really just hit on it. This is this is an incentive, right? If your employer is going to match some of your student loan payments and you it doesn't really matter how much student loan debt you have, it's free money. Why would you not want to be a part of that? So I think definitely encourage more folks to participate, which is great in helping their financial wellness. Your body. Going back to something you said at the beginning of this in terms of, you know, how a record keeper is handling this, how our service providers handle in this, I would encourage folks, if you did not attend last month's Secure webinar series, I would encourage you to check that one out called Incentivizing Participant Engagement. In that session, we had Blake Willis, who is Chief Operating Officer for July Business Services Retirement Plan Record Keeper. And we did touch on student loan matching and how from a recordkeeping standpoint, how they're taking a look at this. So I encourage you to go back and take a look at that if you're more interested in that aspect of this as well.

Bonnie [00:26:30] One other point I would make is I think a lot of question come in, maybe a couple of important questions. I think the student loan matching provision actually gets a ton of questions when I have this conversation with folks. And so we could probably do it to your point about the last seven or you could do a whole other webinar too, just on this topic. But one I did see was, you know, does it have to be a particular type of student loan? And so there is a specific definition that applies for it has to be a qualified student loan payment. And so there is a broad definition of and that includes any indebtedness incurred by the employee solely to pay qualified higher education expenses of the employee. So I'll just encourage, you know, taking a look at what that definition is, what it includes, etc., but being mindful of that.

Kleeman: Great call out. Great question. Thank you. Additional thoughts Alicia or Bonnie or do you want to move on to the next section?

Alicia: I think you can move on to next.

Bonnie: Great. So maybe we'll hit on what I would consider to be one of the most confusing areas, which is required minimum distributions. And I think this is where when we were preparing for this, I said I don't do math problems. So I defer to Michael and to Alicia on this one. But what I mean by that is when I think about required minimum distributions, this is one that I think for a lot of folks, it's a great opportunity to demonstrate value both on the plan side and on the wealth side because it's changed so much. So when we talk about demonstrating value, it really is the opportunity to feel, Hey, as an advisor, you've been paying attention. And again, this is where we talk about, you know, you can partner with others, but when we think about secure with 2019 and then cares and then this secure 2.0, we've had a lot of changes around RMDs or required minimum distributions. So I think what we really wanted to make sure we covered in this provision today and again, there are multiple changes that have happened around our edges, but we wanted to talk about the changes with respect to the increase in the age of participant is required to go taking those mandatory distributions. So when we looked at the proposal leading up to secure 2.0, there were a couple of different iterations. And the way it turns out is that effective as of one 2023, the R&D age where we have to start taking distributions of 73 and then that goes up again. And so we look at effective as of one one 2033 that are MDH goes to 75. So maybe we shot turned over to you to talk a little bit more about that and some of the messaging around that for clients.

Alicia: Sure. So I'm thinking about it in a couple of different ways. First, if I had planned on taking an RMD this year and I'm turning 72, I don't have to. That's great. I get one more year, but I also have one more year of considerations to say, Do I want to maybe make a conversion into a Roth before I get to an age where I need to start taking distributions? This could potentially help to reduce the required distributions and in future years. So it's one thing to think about you have a couple more months left of the year. There might be kinds, if that's a good option for and a good conversation to have with them. Of course, we're reviewing with them if they're going to start at age 73. Are they starting at the end of 2024 or would they defer until the first quarter of 2025? So they have a couple of options there to reconsider. Another thing to consider is if you're already taking RMDs and part of that there's a Roth 41k effective in 2024. Those plans are now exempt. So it's another opportunity to reach out to clients to make sure that they understand everything that has changed. Are there things that they should review about their DE simulation plan? Are there things that they should think about from an income perspective? If they were including that as part of their R&D and as part of their income source or for the year? Another thing to keep in mind with this group to. Oh, but that they have enough savings for retirement. They're very concerned about inflation and keeping up with inflation. And so that's another topic to add to the conversation to make sure that they feel that they're covered. What other options that they might have and some reassurance that you have. You have them on a plan and you'll keep them on a plan. So just some things to firm up.

Bonnie: Any questions that we want to head on there before we move on to the next provision?

Alicia: I'm not seeing any current questions about me.

Bonnie: Perfect. Then I think we'll go ahead and move on to our last main provision that we wanted to hit on today, which will be our catch up contributions discussion. So as it relates to catch up contributions, I think what we want to really talk about here is effectively giving one 125 individuals who are age 60 to 63 have an increased catch up limit of $10,000. The other bigger thing, which I think, you know, we wanted to hit that piece that effective as of one 120 for employees with compensation of 145,000 or greater have catch up contributions subject to RA tax treatment. Now. Well I think the first provision I mentioned is important. I think from my perspective, one of the biggest, biggest headaches that I'm running into when I'm talking about the 145,000 and Roth catch up for plan sponsors and for record keepers alike, this seems to be one of the heaviest left of all of security, 2.0 and certainly is welcome, Michael, on that issue, your perspective on that. I just did a blog post that I titled Roth Roadblocks, and I did that because I think just the operational nature of the 145,000 and monitoring that 145,000 as it relates to that catch up and the tax treatment of Roth for the 145,000, that seems to be one of the most difficult ones.

So I wanted to just make sure I kind of restate that another way, which is here, when we look at section 63 of secure 2.0, this is not an optional provision. So this is a required provision, unlike some of the others that we talked about that are optional. And it says that all catch up contributions starting as January 1st, 2024. They have to be. ROTH If you have a participant that makes 145,000 or more, then that's got to go to Roth starting next year. And that's based on the prior year's compensation. So I'd love to hear, you know, kind of we should both. How do we handle that? We're starting to have those conversations with participants this year about what that means for next year. But also then there's thinking about it from the plan sponsors perspective of, Hey, how are you going to handle this from a plan document perspective? Because different plan sponsors are certainly thinking about it in different ways. Some are handling the provision as implemented. Some are saying we're going to change our plan and we're just going to do away with catch up. Others are saying, well, we're going to make all catch up. ROTH And those really thinking about what's the plan doing, and then also those financial planning provisions.

Alicia: Yeah. Bonnie, I also have another question, but I'll get to that after I get to some of these first. Certainly there have been some recent behavioral finance studies that show that at certain milestone ages, people are more receptive to talking about their finances and receiving advice. And if you look at some of these dates on this slide, there are those milestone ages. So 50, 55, 60, 62, 65. That's a point where people get a little bit more concerned, Am I ready for retirement? Am I ready for what's next? And welcome, help and welcome advice. So it's a good time to look at your book of business, look at what clients may fall into those categories and address some of these considerations. So first, for the 60 to 63 and the increased catch up contributions. Again, just talking to people about adjusting your savings plan, what does that mean? Will you max that out? Do you have to max that out? This provision in the catch up contributions is fairly popular in plans. Six in ten eligible participants make catch up contributions when they can. So there are a lot of active people who take advantage of it. With regards to the 145,000 and above at age 50. That is an interesting one because you'd want to make sure that your employer is going to support the Roth provision. And I know you kind of hit on it, and that was really my question. If an employer chooses not to do have a Roth option, does that mean that I'm out of luck and I can only make my pretax contributions and can't make up the additional catch up contributions?

Bonnie: Yeah. Great question or clarification, rather. So cancer is not something that you're required to have as a planned design option. So now I think most plants that I run across today and this goes to what you said, I think what you say six and ten. I can't recall the stat you just mentioned, but you know, participants that utilize that, but you're not required to have catch up contributions. It's just like another thing. You know, plans are not required to have Ross as an option. And so that's one thing we've been talking to a lot of folks about is like and again, I should clarify, work I had in plan the plan design option to have Ross in a plan as an option for those contributions. And so you're not required to have that, although historically in the last couple of years we've seen those plans do have RA. Pretty much all plans have catch up as an option, but you're not required to. And so the question is, you know, if an employer size from a compliance perspective or payroll company or a record keeper is not going to be able to help us monitor this 145,000 cutoff. Well, we don't want to get into trouble with our plan. So we're just going to eliminate catch up altogether from a plan design perspective. That wouldn't be a great opportunity for participants, but that is something that I've seen a few plan sponsors contemplate.

Alicia: Thanks for a clarification. It was some other things too, to keep in mind. Yeah. The again, the next generation. We are the least prepared for retirement. I, I believe 45% I think of us are afraid that we're going to run out of money during retirement. And only 15% say that they are confident that they're going to live comfortably. So I think it's a really good conversation to have with your clients in their forties and fifties. I'm trying to get them prepared early so that they understand the limitations of their plan and they know what they can make into their savings plan and their tuition plans.

Kleeman: Now, this is a really great topic and based on the number of questions we see, there's a ton of interest here maybe just to kind of go through a couple. While we're on this topic, you know, one is around the increased catch up limit, age 63, 63, and what happens after you get out of that range of 64 and later. And so to answer that question in the Lisa, Bonnie, please, they step in. But the catch up limit. Is increased on before that and after that. It is the standard limit that we're used to today. Okay. And it is this this kind of reef does have that increased ketchup amounts. Additionally, a couple other questions here around this. One is around. You know, is this provision dependent on the number of employees in the plant at all? Does it matter if you're a small plant versus a big plant? Bonnie, I don't know if you have any thoughts there.

Bonnie: Yeah, great clarification. And unfortunately this is a provision that it does not matter how many employees you have. So unlike some of our other provisions where there's kind of a 50 participant or a 100 participant cut off for small versus large plans. When it comes to the catch up provision, there is no differentiation if you are large or a small plan.

Kleeman: Great. Thanks, Bonnie. All right. We want to maybe move on now to, um, you know, provisions or categories of provisions in secure and maybe how we might want to target different audiences and a little bit of background on those. So kind of maybe more in general now talking about some of the financial planning considerations. What areas and techniques and tools can we use to strengthen engagement where we're talking to some of our clients? Right. So that relates to some of the things that we've covered in secure, but kind of more in general, you know, what, what might we want to do? So at least maybe I'll kick it over to you, kind of talk through some different techniques that you might have.

Alicia: Yeah, sure. So as we were mentioning, the different provisions in different messaging. I think first and foremost, curating some of these campaigns, finding some educational pieces, just some plain English explanations to what's. Some of these provisions might mean to a client and specifically to their health. Open up that door for more conversation. Another thing that you could use this for is to help break through that planning barrier. There are some clients that don't necessarily think they need a full blown financial plan or might be intimidated by it. And so by taking some of this information, using a very simple one page overview, this is where you are. This is where you want to be. Here's how we're going to get you there. Simple messaging that would resonate. Things that will show your clients that they can have control over their own retirement and can give them peace of mind. Those messages seem to resonate and then get you to continue that that conversation. Another piece is just some basic hypotheticals. If we go back to the 529 conversation at the top of the call, there were a lot of questions. I said, And so are there some simple scenarios you could illustrate that are specific to the client's situation and explain the benefits of changing the beneficiary versus rolling something over to the beneficiaries Roth account And then just explaining how you step in to the contributions over the 5 to 6 year period to complete the conversion. Another thing to think about is a campaign that focuses on the entire family.

More than half of Americans in their forties and fifties are considered a sandwich generation, so they're between raising and caring for their children, which might include adult children over 18 that they're still supporting as well as caring for aging parents. And when you look at that group of people, one in five of them are financially supporting both their children and their parents. Talk about stressful situations. They need to think about someone's education, their own retirement, and potentially their parent's health care and retirement. So crafting some educational material for them, how to manage those, how to prioritize, and sometimes to not be afraid to prioritize yourself over some other goal that the family has. I think that is an interesting opportunity to open up the door to speaking to children of your clients and just getting to know them a little bit better, getting to know their values, helping them understand their parents values, taking that that view of education across the family, education at all levels. And I think the last piece that I'd say is just making sure that things are consumable, right? Anybody can understand the messaging. It seems attainable. It resonates with the audience trying to meet the clients where they are. Sometimes if you come in with broad strokes of how much money do you want to spend in retirement, people have no idea. They probably have no idea how much they're spending today. So thinking about how you can take small steps in the near-term to plant those seeds for longer term focus and keep them engaged in the conversation. One of the things that I think is most frustrating about a financial plan is you feel like you do a lot of work, you put into it and then that's it. Conversation stops. So how do you continue to engage with the client to keep that conversation going?

Kleeman: Oh, that's great. Alicia, thanks for. Thanks for that. You know, there's a lot of different techniques that you just went over, different opportunities to engage clients further. And sometimes these are things that, you know, you can certainly do on your own, do in-house. Other times, you know, maybe it makes sense to bring in an outside entity, a partner, a tool to help you with some of these things. So maybe if we take a little bit of time to talk about partners and how we can kind of leverage them to maximize our ability to communicate with our clients and extract more value their SWOT analysis. Alicia Bonnie, if one of you wants to dive into this a little bit.

Bonnie: Sure. Maybe I'll jump in with a few thoughts here and then certainly, you know, Clement or Alicia, if you have additional thoughts, please feel free to chime in. I think, you know, one of the things that we were preparing for today's webinar and getting our arms around just all that we wanted to accomplish, I think a theme that resonated with the group here was that, you know, there's a lot in security 2.0. And as I mentioned when I jumped in at the beginning of the webinar, I think it's so clear to me that there's been this trend coming for several years, and specifically with the exclamation point from security point out that it can't just be a retirement fund specialist and you can't just be a wealth manager. That being said, I think it was you claim and who came back and said, you know, but you don't have to know at all. You can't know all 92 provisions. You can't know all the financial planning things while at the same time being an expert in how to go deep on the student loan matching provision on the plan's sponsor side. So how do you really do that? And I think one of the things that comes to mind for me is like, how do you put together your partnership group or your real of who's in your partnership? Well, and for me, that starts with you have to identify the strengths in your own practice. What are you really good at? What do you really enjoy doing and what is it that you find brings the most value to your client? Then, based on where you're finding the strengths in your own practice, determine if there's opportunities to partner with others, and those might be partnership opportunities where you're saying, you know, I can partner with these people and we're going to have referral fees back and forth, Maybe there's some sort of compensation.

Maybe these are just members in the community where I'm really good at the planning side. These folks are good at the wealth side. This is my CPA I partner with really well, this is my trust and estate person that I partner with really well, this is my attorney I partner with, but it's really about figuring out what are you really good at, what do you enjoy? And then where can you find these other partners and say, Hey, I can increase value because based on these 92 provisions or these six main categories of secure 2.0, I can find partners for these five other categories of skills you point out. And these five other partners, they're going to send me this list for the things I'm really good at, and I'm going to send them best for the things that are really good. And together we're going to create this really, really strong partnership so that my client has all their needs met. And I think that can really create strong relationships for you, better referral networks and really the best outcome for both your clients and prospects. So one of the things I like to think about is then once you've identified the partners, be it for compensation, not for compensation, however, you think you can best have those partnerships. How do you really cultivate those relationships and then continually find ways to mutually add value to those partners? And it might sound really simple, but I think there's really some good ways that you can maximize the value as opposed to just trying to go it alone and do it all on your own over time. So finding those partners find the best tools and partners to help create that value. And doing so by even just, you know, finding those in your own community, community locally and nationally. So. Alisha Michael, you might have additional thoughts, but I think that kind of helps to wrap together all of these different concepts, both from this secure 2.0 webinar, but all of the webinars in this series from average up by three six week.

Alicia: I think you summed it up well, Barney. And the one thing I'll add is, you know, we started talking about clients have a desire for communication. They have a desire for education. When you look at the most productive financial advisors, they're spending more than 10% of their time, more 10% more time, sorry, face to face with clients or in client meetings than advisors that are not as productive. And basically what that tells us is the value that they're creating is by talking to clients, educating them, showing them other options that they have. So the engagement piece is key. And I know it's hard to find that extra time in the day. But that goes to the point that Bonnie was saying about what are the right tools. And for this type of conversation, it's really thinking about what are some of those digital marketing or other tools that are going to help me be much more effective in crafting my message, creating it, and then tracking it to make sure the clients are looking at it, that they're engaging with the content. And that what I'm delivering to them is meaningful as a value add. So I don't necessarily have to always be face to face with them or on the phone with them, but they know by getting these communications and I'm thinking about them and I care about their best path to retirement.

Kleeman: Yeah. Great, Great point, Alicia. I think focusing on your core competency and where you can really provide that value is crucial. And you identify that, right? You're providing value by being in front of the client, whether that's physically or for some other form, that's really key. And then identifying your core competency, maybe it's not, you know, crafting, you know, email marketing messages or maybe it's not. You know, on the last time you talked about curating custom campaigns, but maybe that's not your biggest strength. So find a partner that can help you with that. And there's a lot of firms out there that offer, you know, materials, education, materials, email materials, website materials, a lot of firms out there. So definitely recommend finding the best fit for you to really take advantage of that. And that's something that I think you know outside of the advisor community, right? I personal experience my role at Broadridge. I work a lot with record. Keeper. Asset managers size and small broker. Their core competency and beginning to outsource some things that may be Arthur specialty to somebody who can maybe do it more effectively so they can really focus on where they're driving value to their clients. And that I think is just that kind of at least the way I think about it right at all, analogous to the individual advisor. And they need to do the same thing in business. So a lot of opportunity there. We've got a few minutes left. A ton of great questions came in, so I'm not going to get to all, but I want to make sure we did on a couple more because we talked about a lot of big provisions and ways that you communicate with your clients about those provisions. So maybe, Bonnie, let me maybe address this one for you. And it's really kind of around the student loan matching provisions. So question around that. Does it mean that the company match that the employer would normally pay into the employees for on the account is going to the employees loan accounts? Does it mean that the student is getting the same amount of the loan payment for their student loan? Do the elaborate a little bit on how that provision would actually be implemented in terms of making that payment?

Bonnie: Yeah, maybe just a couple of comments or clarifications on the student loan matching provision. And some people may be familiar with this because it really came out of an IRS private letter ruling from 2018. And keep in mind, maybe two things. Some of these are happening inside of the plan or what will happen inside of the plan. Starting one one at 2024. And some of these are going to happen outside of the plan. So what I'm describing here is inside the plan, and it's where a plan is going to treat the student loan match the same as matches are participant deferrals. So if I make X percent to, you know, if it's a 3% match and I make that same amount to my student loan, instead of making that to the plan as a participant, I pay my student loan back. I self-certify that I did that and then I get a match from my employer going into the plan itself. So I pay my student loans. My employer gives me the match into the retirement plan. A quick clarification on employee certification. That employee certification, I think there was another similar question on is self certification a requirement? Yes, the requirement is that the employee does or the participant does have to self certify that they made that payment to their student loan and that it was the qualified student loan payment as defined. I do think one big thing here is that there will eventually be additional guidance. So that's part of it, is that the IRS is authorized to issue additional guidance. It'll probably take a while, but I do think we'll get additional guidance at some point.

Kleeman: That makes sense. But obviously, specifically on the student loan payment you're referring to. But there are a number of provisions in security and I know that are implementing self-certification around some withdrawal types of hardship withdrawal types and things like that. So definitely agree expect some more guidance in the coming months on self-certification and how that works. Maybe time for one more question or so. How about one clarifying something on the R&D? So with the jump to 73, as the age for R&D is in 2023 and then the jump to 75 and 2033, is that a type of a phase in period or is it strictly 73 in 2023 and then 75 in 2033?

Bonnie: I'd take that one information you'd prefer not to, but that is it. It jumps. That is not and correct me if I'm wrong, but that is not like a phased in over time. If I understood that question right.

Kleeman: That that's that's correct it. Excellent. Before we kind of close, any last words, Alicia or Bonnie?

Alicia: I just want to thank everybody for the participation today. Really good questions. Thank you, Michael, for inviting me to join the webinar today. And thanks, Bonnie, for the conversation. I learned a lot too, so I appreciate it.

Bonnie: Certainly agree. You know, Thank you, two brothers for hosting and Alicia and Michael for that great conversation. And thanks for all the participants. I know there's definitely some questions we did not get to. So I know we'll be doing some follow up to make sure we get to some of those questions that we didn't get to today and appreciate all the good questions. And I'm sure we'll have some additional clarifications if necessary. So thanks again to everyone.

Kleeman: I absolutely agree. Agree Alicia, agree Bonnie. you know, on the screen here and in the materials that you have. We do have links to more resources and broader range around security to point out. So definitely check that out. There's also information in the resources section around some of the secure resources that bodies firm Endeavor has put together. So definitely check that out. We will take a look at all the questions. Again, many questions we'll get to answer as many of those as we possibly can in a follow up. And I want to again invite everyone to check out the two previous webinars we've had in the series, as well as our upcoming webinar next month on August 17th at 2 p.m. Eastern. We'll be talking about a range of topics, including emergency savings accounts, the annual paper statement requirement that's come out of secure collective investment trusts and in 403B plans and a number of other topics. So definitely check those out. Our contact information is here. Please feel free to reach out with any questions and if you're interested in any tools that can help you communicate better with your clients, Broadridge certainly has those as well as a number of other firms. So please feel free to reach out to us. So thanks everyone for your time and if you have any additional questions, please follow up with Fi360support@Broadridge.com for technical questions and look forward to seeing you at the next webinar. Thanks, everyone.