Speaker 1: Good afternoon everyone, and thank you for attending today's webinar where we will deliver an overview of key secure provisions. Before we begin today, I want to cover a few housekeeping items. At the bottom of your screen, you can see multiple application engagement widgets, which you can use. All of these can be moved, resized, or minimized. So feel free to customize your desktop space and access any of the widgets as you see fit. Additionally, today's session has been accepted for one hour of CE credit by Fi360, IWI, and the CFP board designations to receive CE for this live webinar. It's important that you join the webinar using the email address associated with your Fi360 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 qualify for the credit. For those who do qualify for CE credit, there's no additional action on your part. You'll receive an email confirmation as soon as the CE is processed. If you have any questions during the Webcasts, please submit them through the Q&A widget. But you're slides are behind pushing F5 and your keyboard will help refresh the page. We'll have an on demand version of the webcast available within 1 to 2 days after today's session. So as we get started today, I'd like to introduce our speakers. So first myself, Michael Kleeman. I am senior director of Strategy here at Broadridge. Leading Things for Retirement and Workplace Division. And I'm very excited today to be joined by two great speakers, Sue Diehl and Tim Slavin. Sue is president of Penserv Plan Services and a preeminent retirement planning and benefits expert.

Sue has an impressive array of credentials, including her qualified pension administrator, certified pension consultant, tax exempt and governmental plan consultant, enrolled Retirement Plan agent and is a board certified fiduciary. Sue has served on multiple committees at the IRS, including the Advisory Committee on Tax Exempt and Government entities where she helped form the IRS 403b liaison group with her expertise to testify before the IRS and the DOL on Retirement Plan regulatory issues and serves as chair of the National Tax Deferred Savings Association, Government Affairs Committee, and the Legislative Relations Committee of Asthma. She's also served on and participated in various IRS committees and has been past president of the NTSA and a board member of the right. I'd also like to introduce Tim Slavin. Tim is senior vice president of Retirement here at Broadridge Financial. In his role with Broadridge since 2020, excuse me. For more than ten years, Tim has focused on all things retirement at Broadridge and has helped build our firm into one of the top retirement service providers. Tim is on the advisory board of SPARC and has written articles for multiple industry publications. Prior to his time at Broadridge, Tim was co-founder and CEO of Invest Re, a cloud based DC recordkeeping platform and has held senior management level positions at Bankers Trust, ADP and AT&T. It's nice to have both of our presenters with us today. Definitely check out their bios if you'd like to learn more. There's too many credentials to read a list here that'll take up the whole session. So, okay, a little bit about today's session. So we're going to cover a number of key secure to our own provisions. We're going to hit on five or six kind of major categories. Make sure that you can understand what those provisions are. But even more importantly, I think many of us are familiar with secure at this point is, you know, the implications of these provisions. What we're hearing around the industry, how some of these things are being implemented, some of the concerns around some of these.

And then also, you know, what we're hearing from the regulatory agencies, from the IRS, from the DEA. Well, what type of guidance are receiving and when can we expect more guidance? So as we kick off today, again, just real quick, just a couple of minutes unsecure again, I think most individuals are probably familiar at a high level by now. But again, this is really some of the most important legislation we've had in the retirement industry for 40, 50 years. And it's it's critical that now is the time for this legislation because we have a retirement crisis in the United States. Right. There's an $11 trillion shortfall in retirement savings that individuals do not have. More than 56 million workers don't have access to any type of retirement savings plan at work. And the government is now getting involved to try to help rectify some of this. And there's really kind of twofold. One is on the federal side and one is on the states, nine states. A number of them are beginning to implement and mandate state sponsored IRAs and other retirement savings vehicles. And then today, we're really going to focus more on is on the federal side. And that's secure, too, not only which is the bulk of that legislation. It's so secure, too. Not all really covers, you know, a couple major goals. And it really is about increasing availability of retirement plans in the marketplace at large, getting more individuals to participate in the retirement plans, whether are new plans that are being created because it's secure or ways that encourage participants to contribute or get enrolled in existing retirement savings plans, and then greater flexibility as well to be able to allow participants to come and go different access to their funds and things of that nature. So at a high level, right, that's kind of the overarching goals of security that I want to spend most of our time today diving into some of these provisions, some of these categories of these provisions and kind of what we're hearing in the industry. And so that's why I'd love to bring Tim and Sue into the picture here. So as we kind of kick off the first topic, Sue and Tim, that I really get kind of teed up for us today was around pension contributions. This is something that I think we're hearing a lot of right in the industry. There's some pretty significant changes here to how retirement plans work with catch-up contributions and how plans are being impacted by this. So, you know, Sue, maybe I'll start with you. You may spend a couple of minutes just talking about what some of these kind of notable catch up provisions are and what we're hearing out there.

Speaker 2: Yes. And, you know, first I'm actually going to hit 63, which is the second item on the slide first. We have an issue actually, Congress created the issue where they deleted an incorrect section in that provision so that technically, beginning January of next year, there is no such thing as a catch up. Now, don't get upset about that, because basically what Congress has done is they've written a letter to Treasury saying, we're going to fix it. We don't know when they're going to fix it, but rumor has it that it won't be until much later this year. We all are supposed to proceed as if we will have catch up. So I know there's been a lot of articles out there saying, you know, do we forget this until we get clarification? But apparently it will, you know, 603 will be corrected so that we will have catch ups going forward. I think this these two provisions in particular have been something that, you know, I know a lot of advisors, a lot of people's consulting firms are meeting with their clients to explain to them that, you know, there may be certain individuals and again, I'm going to go down to the bottom for a minute. You know that once you look at people this year that earn and it's wages of 145,000 are greater than their catch up provisions, my must be Roth catch ups. There are many people out there that still don't have Roth added to their plan. So that's issue number one. Do you want to allow for catch ups for these individuals? Then you're going to have to add Roth to your plan. And I think it's a matter of discussing it with the clients. And so far, I can tell you, just from our experience, we've had many of them add the Roth provision that haven't had it. They're not happy with it. You know, they are looking at their payroll systems to make sure that they can monitor that. 145 And as I said, it's wages. We don't care about what they make outside of the plan, which I know a lot of people have gotten confused with as well. And that's effective for next year. So as we go into the end of 23, I have heard that some larger employers are trying to identify those that may hit that 145 so that, you know, they're ready to kind of switch the catch up to a Roth deferral instead of the pretax. And then for the higher catch ups. And Tim, I'll let you chime in and then we'll maybe talk about this. But the higher catch ups, you know, 460 through 63, again, that is an age catch up. So we're going to have the Roth treatment on catch ups as well. So again, having to look at who makes the 145 or whatever the figure is in the future, the increase amount is actually going to be the greater of 10,000. Or we take the current catch up, which right now is 70 550% to that. And if that stays the same, that would keep us that would get us up to what, 7500 plus 37, 50 or 11000 to 50. So that would be the greater of the two. And then they would subject that to the 10,000 to cost of living adjustments in 2026. So it's a little bit more complicated. I think the challenge that we've heard of from the employer side is making sure that either they set up their payroll to accommodate this or work with the firm that's going to keep them in track. You know, I notice that the Section 109 provision is effective beginning in 2025. So a year later, we have next year, January 1st, to get ready for the 145 and then, you know, do the 60 through 63. Once we get to 64, we go back to the regular catch up limit. So it's only for those intervening years.

Speaker 3: Yeah. One point that Broadridge works with Spark and ASPA and also American Securities Association. We work generally with the associations to try to lobby getting things off stopped or move through dwell. Well, we don't go directly. It's just not appropriate for a public company to do that. But we, we spend a lot of time with Spark on that and that's fine. And like everybody else, we're trying to get things delayed and we're trying to get things sorted. But it's like everything else, it takes time.

Speaker 2: Right. Fortune You're right, Tim. You're right. There's been actually I think Spark was on the letter that ARA was on with over 250 associations and companies asking for a delay in this. You know, I mean, I don't I don't know if we're going to get one. I've heard we're not. So we cause this. Well, this is true. This is a you know, this would take away too much money from the government. They'd have to take something else away from us if there was a delay. So, you know, who knows what's going to happen? But that's what we're hearing.

Speaker 3: Yeah. We just feel when we talk to the government, they would like everything to go wrong because they don't think they're only thinking about present tax revenues. Now, they don't worry about things going forward because they might be not running for reelection by the time that happens or whatever. And so we see more and more that everything is pushing to a roar. So, oh, we don't we don't expect anything dramatic come out in the short term like suicide.

Speaker 2: Unfortunately.

Speaker 1: For now, that's great. And you touched on one of the questions that was coming in in the chat. And so let me just remind everybody, please, if you have questions on these topics, shoot em and we'll try to answer them as best we can now. And we'll save some time for Q&A at the end. But that was one was around kind of the timing. And do we expect do we expect this permission to be the way you know, a couple other kind of questions that I see come in in the chat just made some clarifications around these provisions. Do these apply to all plan types with reviews included in these? Are these just for one phase? I see a couple of folks asking that question.

Speaker 2: It applies to all plans for three days as well. There is a special catch up in 43 days which this would not affect. So you've got your 15 years of service that's not geared to an age, so that is not affected with a mandatory wrath. But any catch up age 50 catch up in the qualified plan, the 401k or the 403b would be affected by this. One other thing mentioned, and we don't know if this is an oversight or not, but very clearly the 145 is mentioned as wages. When you look at a sole proprietor, a self-employed individual, their compensation does not fit on your wages under 3121. So therefore, that provision does not apply to a self-employed as of right now. Again, we don't know if that's an oversight. We don't know if they meant to do that. So it will apply, for example, for any of you who also have a solo case. It's not going to apply to that self-employed individual. But all the other plans. Yes.

Speaker 1: Great. Great. Yeah. No, that's fantastic. Now, these provisions, these are both mandatory, correct? These are not because there's a number of provisions in secure that are mandatory. There's a number that are, you know, permissive. And you have the option to in this case, both of these are mandatory provisions where contributions to pension contributions for employees earning 145 or greater are required to be in Roth and the age 60 to 63. Additional catch of contribution that's required that a plan has to allow that, right?

Speaker 2: Yes. And, you know, actually, we've heard some and you have to be careful. We've heard some employers say, well, I'm just not going to add Roth to my plan. And if that's the case, then, you know, anybody earning 145 or greater is not going to be able to make a catch up contribution. You know, and then I've heard other people, too. And of course, you could do that. You don't have to have Roth in your plan at all. You can't just have the Roth for the catch up contribution. Remember going all the way back to your, you know, beginning days and foregoing Kaye's and Roth. The Roth is an alternative to the pretax. So you can't just have a Roth plan that's not available. And if you add Roth, it's an alternative to the pretax meaning The pretax has to be in there as well. So you just have to be careful. You know, you can't you know, you can't just have you can have excess pretax, then you're not going to have the catch up to the 145 or greater. You can't just have Roth. So, you know, I think that's what we're hearing. People are trying to come up with alternative ways to, you know, either not include this or include this. But you're right. You're right, Michael. It's mandatory.

Speaker 1: Great. Thanks for that clarification. And so, you know, we're talking a lot about Roth here, and I think that's really a great transition being kind of the next topic, which is the ratification of 401k plans and the four three plans in general. I want to remind people to please keep the many questions we're getting. Some great ones will save some more time for Q&A at the end. And if we don't get to your question, we'll see if we can follow up with you after the fact. So I want to just acknowledge that that really love all the questions that we're getting here, and it's making for a great conversation. But I think you really transitioned nicely into kind of the ratification of retirement in general. So there's a number of different provisions in secure that all have to do with Roth some form or another. We've got a couple here on the screen. So, you know, I don't know Sue or Tim, do you maybe want to whoever wants to start trying to kick off with just kind of an overview of some of the things that are happening in the world that.

Speaker 3: Well, at the macro level, as I mentioned before, the government prefers Roth. They would like to get the deductions gone. That's my personal opinion. And I think a lot of this is leaning towards that. As you mentioned, the whole thing around catch up contribution is required for the higher earners I think is one example. But I do think that you'll see more and more pushing and maybe means testing eventually. That's getting just an opinion on the ability to deduct any money from your deduct from your W-2, your phone contributions. I think you'll see means testing on for one case, one question came up, but we're not we're not seeing as much, you know, volume lately of people setting up recordkeeping, setting up a process. I thought I think it's everybody is kind of still in a wait and see. A no one is jumping out ahead of it. I think, as we've said, it's going to take a while to get answers from Congress and be clear about it. So we don't see that we don't see as much activity as we thought when it was first announced. So I don't know what you I don't know if you agree with that, but that's what we see.

Speaker 2: On the catch up. Yeah. It's I think people.

Speaker 3: Are.

Speaker 2: Worried that if they spend a lot of money on their payroll system, you know, record keepers, advisors, you know, talking to clients that something's going to happen from the government that says, okay, don't worry about this, you know, or we're going to delay it. So I think people are kind of, you know, it's a it's a wait and see, I hope, pattern, if you will, to see if anything will change going forward. I'm not sure about the catch up. I think the you know, if you look at secure 2.0 is the whole you know, and of course you've got to pay for it and you've got the nice things they've given us, that's a big pay for the ratification. So, you know, if we if they change it, then they're going to have to take something else away from us. So, you know, we'll see what happens. But I agree. I agree. I'll tell you, we've gotten a lot of questions on the option to have certain employer contributions. B, Right. As a matter of fact, the day after this was enacted, we had our first phone call that said, Could you give me a step in a simple plan that allow for employer contributions to be right now? I'm hoping they were kidding, but it was literally the day after secure was passed. So of course, we didn't we don't have the guidance on that. And, you know, we'll, you know, think about this in two ways to kind of break it down. First of all, it is an employer contribution and let's forget Steps and simples for a minute. But look at the four three day and the 41k plans or profit sharing plans. So any plan that would have a non elective or a matching and the employer is going to add to their plan and provide the option to the employees to treat the employer contribution as a Roth. It still is an employer contribution. So remember that and that there will not be any fire cut taxes that come out of that contribution because it is in fact an employer contribution. However, it will be taxed to the employees. What effect does that have on their payroll? What effect does that have on the form W-2? We don't know. Will an employer have to report that somewhere on the W-2? We think so because it is taxed. It is not an elective deferral.

So it won't you know, it won't show up in Box 12 as your Roth deferral or pretax. But we think it's going to it has to be on there somewhere for the taxation issues. We have to wait for the IRS to issue their form W-2 and the instructions. And remember, that applies for this year. So we don't know how you know, how employers and I think employers would be interested in that provision. But again, they're gun shy because they don't know how the effect will be on their payroll and their issuance of W-2s. Now, that same basic requirement or guidance is needed with respect to Roth contributions employer contract. Issues to a SAP or a simple Iraq. Not to mention the fact we don't have documents to handle that. We don't know what the reporting is. We don't know if it's reported differently on the 1099 mark coming out. Are there special codes? You know, and I think the industry has learned their lesson from the past that you really don't want to have something added to a plan if you don't know how it is going to be reported at the end. It's a lot harder to go back track and figure out what provisions or, you know, what transactions need to have a special code when you already done that. But I think that the key here is that employers are the ones that are saying, well, how does this affect my W-2, my payroll company? And we've heard that there's very few payroll providers that are going to be ready for basically the ratification. Even going back to the catch up provisions. So I think people are trying to work through this and get ready, even though we don't have all the answers. Anything. You want to.

Speaker 3: Know? I think that's covers it. That's great. A lot of questions, though.

Speaker 2: Yeah. Yeah. And then the third one on this slide here, the exemption from the RMDs, you know, they, they took the Roth IRA, which, which has never had a pre death, required minimum distribution and coordinated the designated Roth with the Roth IRA. So effective now there is no R&D from a living, breathing person who has a designated Roth balance or a balance in a Roth IRA. I know there are. Yeah.

Speaker 3: That's what I think. You move on, Michael.

Speaker 1: Yeah, Yeah, absolutely. We can move on to get a lot of great questions coming in. I think we're definitely going to do a kind of a post webinar follow up. We'll send out some additional materials. There's so many great questions and we're just not gonna be able to get to all of them. But please keep them coming because we do want to make sure your questions do get addressed in some form or fashion. And I think one of the key things, you know, I've seen a couple a couple of folks in the in the Q&A chat kind of address. This is, you know, we're educating ourselves, right? We're educating ourselves as advisors in the community. And we need to do that to be able to educate our plan sponsors. I've seen a couple of people, you know, comment that they're talking to their clients and they're not they're not aware of, you know, some of these wrath provisions. And so I think the more we can understand it, the more we can help explain to our clients, the more they can take advantage of, you know, new provisions that might be of benefit to them. So that's kind of a goal of what we're covering here. So maybe shifting gears just a little bit. I want to talk about paper statements for a minute. Right. So, hey, the world's been moving to digital. We're moving to digital. Everything's digital. And now maybe we're going to take a little step back and make sure that people also are getting some physical print mail here as well as an option. So, Tim, you know, maybe I'll start off with you on this one. Can you talk a little bit about the annual paper statement rule that's coming into play with Secure.

Speaker 3: Right? Sure. You know, this was lobbied hard by a lot of people, too, including the paper industry. What a surprise to have in a one paper statement. We also had AARP lobbying constantly about getting paper statements like people over 65 don't have access to computers, which is mind boggling. But anyway, if somebody has if the plan is arbitrarily decided to send only delivery and that's it, you now have to offer the ability to log in to get one paper statement. And, you know, that's kind of a big deal as it relates to changes in the annual paper statement. It's no it's not due until 112 26. In the world we live in, which we have significant communications about in the retirement space, about 60% of everything is delivered digitally, i.e. email or digitally. The other 40% are still on paper. But those who had no choice but to get it in paper are now going to have to be receive one paper statement per year. Now, how do you do? This is something we're working on with clients. Meaning how do I even know who decided to opt out of paper? Do I know that the plan made that decision, or did the advisor arbitrarily make that decision? So we're working with the record keepers to kind of understand how can we track that to make sure that A, those that under this rule have to get paper statements, get them, but those that don't don't get them because we don't want to have a flood of paper if it's not necessary. So that's something else that's still has to be worked out. It's gotten less news. It's gotten less interest from the client base because, you know, 20, 26 seems like a long time, but it's not. So, you know, we're going to be spending a lot of time. That's one thing Broadridge will be taking the lead on to try to find out how do we do that and what does this mean? So it's something that, you know, in our view, partially it makes no sense, but we're going to be able to find out what's the best way to do this and how can somebody get the paper statement and then be able to provide access to be able to opt out once you get that first paper statement? So very interesting. I mean, they follow you know, the DDB business for years has been getting paper statements unless somebody opts out. So the ones that have arbitrarily decided no paper statements at the plan level are going to have to get that one paper statement. So I don't know if you have anything else to add on that.

Speaker 2: Now, I wish they had enough brought this back, but I. I understand. I think I agree with you. AARP was instrumental in saying, you know, you have to give at least one paper statement. And then and that's for the the DC plans. DB Plans at least aren't going to require that until, you know, once every three years they have to have a paper statement on unless they opt out. So I think there's too much to worry about. And security, you point out right now too, you know, and like you said, this is 2026 that seems like so far away and we know it's not right. You know, that's kind of on the back burner for right now.

Speaker 3: Totally. Thanks. You know, pretty cool.

Speaker 1: But yeah, seems far away. It's going to be here before you know it. And we're already mid August of 2023. Who would have thought. All right. So you know, next topic, you know this one I think I've personally heard a lot about, and that's the student loan matching provisions. Right. So these are new optional items that plans could start to include in their retirement plans. So so maybe if you could kind of start us off with a brief overview of kind of what this provision is all about. And then I think this is another interesting one in terms of how the folks actually implement this.

Speaker 2: Absolutely. And this one actually I'm pretty excited about. And we have a lot of surprises, but a lot of employers who are asking about this for various reasons. It's, you know, maybe to attract new talent to the employer, maybe to keep some of the younger workers who do have student loan repayments or student loan debt. You know, basically and I'll give a little tiny bit of history. So this actually started with Abbott Laboratories who applied for a private letter rolling to do something similar to this. And what they wanted to do was to allow or keep track of student loan debt. And as the student was paying back their student loan, the employer would match it. Abbott Labs wanted to treat the student loan payments as elective deferrals or kind of deemed elective deferrals, and then the employer would match them. Well, IRS said you can match them, but they will not be treated as elective deferrals. And you know, they didn't get the rolling that they want it. Unfortunately, in the Abbott lab case, they had to do the regular testing for the deferrals because the students who were paying back loans had zero deferrals. And of course that would have affected any ADP test. Secure 2.0 gave us this with some changes, very nice changes which basically said, you know, we will keep track of what the student is paying on their loan. We will match it. So the two key components there is that, first of all, the student is, you know, paying back their loan. We're helping them do that and we're matching it. So we're giving them a retirement benefit as well. And for some of you advisors on that on the phone right now who work in the public school arena, I have to tell you that even public school employers are interested in this because, again, you're helping those students, those new hires by making a matching, so giving them something. And then in the public school arena as well as in certain church plans who also are keen on this, there is no testing. All right. So, you know, you're giving them something. The only and I don't want to call it a problem, but maybe a problematic item to solve is how are you going to make sure that the employee is actually paying back that loan is it coming from payroll? Is the employee self certifying? What happens if the loan payment is returned? So there are some areas that need to be kind of ironed out there. But I got to tell you, there is a lot of interest in this provision. Now, let me switch gears real quick. Everybody can do this 403bs for our one case. But if it is in a risk plan, then we would take the students that are paying back loans who are also getting the match. We would treat those students separately. With respect to the ADP test in a 401k, which will help the plan sponsors satisfy that test in interest of 403b, it would be the same role in 403bs if we were talking about non arrests of 403b or even your church plans other than something a not what we call a non-qualified church controlled organization. The others have no testing whatsoever. So I think this is a provision we're going to see in a high percentage usage as we get some of the kinks worked out going forward.

Speaker 1: You know, I just want to.

Speaker 3: Put you on the spot for questioning. Operationally, are you guys clear how this would work? I mean, as far as getting the transfer. Can you go a little bit into how it would work operationally?

Speaker 2: Okay. So let's say I have no students who are paying back loans right now, but I am looking at hiring, you know, some new employees who are fresh out of school. They still have loan repayments that they need to make and therefore they're probably not going to defer into our plan. So in in as kind of an enticement, we would say, you know what, if you give us proof that you are paying back your student loan and the employer can put, you know, kind of rails around that, they can say, we're only going to match you. Now, if you pay back your student debt, we will match up to X dollars of what you're paying per payroll per year, you know, whatever they want to do. And then we will treat them as if they were elective deferrals going into the plan. And if we treat them that way, then we're matching them so into the plan that you're all administering or advising your client on. We will see matching contributions go into the behalf of those individuals who probably would not be getting any kind of retirement benefit. And at the same time, we're in effect as the plan sponsor helping them pay down their student loan debt. As I mentioned, the one thing that has to be kind of, you know, dealt with from the employer perspective and plan sponsor the record keeper and possibly the third party administrator is to monitor that loan repayment. If your third party administrator is, you know, monitoring payroll, then that's easy. I have heard that some employers do not want to take this from payroll. Of course, that would be an easy way to keep track of the loan repayment. So there will have to be some things sent to the plan sponsor to show proof that that loan payment has been paid. That, I think, is something that needs to be addressed, finalized per employer going through payroll easily. But I understand that employers don't necessarily want to get involved with that. You know, self-certification, that's an option. But how do you monitor your self-certification, especially in this case? Because we are matching what is supposedly a loan payment. So I think it has to be a little bit more than just self-certification. Maybe, you know, a statement from the firm that they're paying back the loan to something like that. That kind of answer your question, Tim.

Speaker 3: It does? Yep. It's complicated.

Speaker 2: Yeah, it is. But I think it can be worked out. I think this is going to be something that we're going to see a lot of. I really do, because it it will entice new, hopefully, you know, good employees that these employers are looking for now.

Speaker 3: It's a major roadblock to have young people invest in their 41k plan to get started. Exactly. To have it in our own organization. And I think this is a great step in the right direction. 100% correct.

Speaker 2: Yep. Now, I do too.

Speaker 3: Although I, I get a kick somebody mentioned before. All right. Student loans can all be eliminated, which I don't think that's going to happen either. But at someone who paid off a fortune in student loans, I don't like that. But anyway.

Speaker 2: All right.

Speaker 1: One, maybe one clarifying question. I see a couple questions in the chat on this topic before we move on is how does the student loan match interact with a regular match? Right. So let me just throw out a scenario, right? I mean, if the plan matches dollar for dollar up to 5% of your contributions, and so maybe you are an employee that is able to electively defer, you know, a certain amount and you're getting matched on that, and then you're also paying off your student loans. If the plan is, you know, 5% is the limit on the match or can you double up to just one, you know, counteract the other? How does that work?

Speaker 2: Well, you're treating the students that are doing this. The employees are doing this as their own special class within the plan. So I don't see a student getting a match under their little class and also a match on the other side, although that's something I think we probably need to have IRS probably address in the testing. So, you know, we'll say, you know, it's we know that they're a separate class and we test them separately with respect to the match on the student loan payments. I guess they would be tested twice, But I that's a good question. Very good question that we don't have an answer to yet.

Speaker 1: More to come. Stay tuned.

Speaker 2: More to come.

Speaker 1: All right. So another kind of big topic that we're hearing a lot about, there's a lot of interest in is around emergency savings accounts. Right. Again, similar in terms of concept, right. Where there's a large percentage of the population, you know, younger folks who are trying to pay off their student loans. And that's a barrier. You know, Tim, you call it out. It's a barrier to people contributing in their 41k plan or for a three year plan. You know, kind of a similar story when it comes to emergency savings rate. Again, there's a large population of folks who are just trying to save up enough money in their bank accounts to handle day to day emergencies. So, you know, some new provisions and security to kind of try to help that a little bit. Right. To do it through your employer, do it through your retirement plan. So, you know, Sue, I think maybe I'll start with you on this one again, I'll frame it a very similar way. Can you give us a brief overview of the emergency savings account provisions and what we're hearing?

Speaker 2: Well, I'm going to tell you a true story because I just went through a lot of the new the emergency savings, the different distributable events that we have now going forward. And, of course, the emergency savings is one of them. There happens to be two of them. This one you're seeing right now is the pension linked emergency savings account. And if you picture this as another sub account under your designated RA, so you if you have Roth going into the plan, you have Roth deferrals already. You potentially have a Roth conversion in plan Roth rollover where they're taking money from their regular 401k assets and putting it into the Roth, or you're now going to have a subcategory under the designated Roth contributions as this emergency savings account. The amount is capped at 20 $500. The employer can always set a lower amount, but the maximum is 2500. An employer can automatically opt employees in at 3% of their salary, which would then be capped at 2500. I had an employer actually laugh at that and said, okay, I'm going to make them save for their emergency by taking 3% out of their salary and putting into this special little sub account within the plan. And pretty much they said, Now we're not doing that. There are two ways to look at this. So and I don't know, do we have the thousand dollar in here as well? Michael, I think.

Speaker 1: I don't believe we on a slide for that one.

Speaker 2: Okay. So let me just mention it. So there is an emergency savings. That is the 2500 that's coming from. Right. There is also an $8,000 emergency withdrawal permitted for any reason under the science. So that's just for family emergencies. No definition either as this one. But they're both permitted optionally under the plan. The employers that I've talked to so far, especially the one last week, said, all right, we've given them hardship. We've given them the loans. Now we're going to give them an emergency savings account, another family emergency withdrawal option. And then there's probably five or six other new distributable events. And their question back to me was, isn't this supposed to be saving for retirement? And, you know, that's true. But there's two ways I'm saying that there is to look at this. One is employees might be more readily available to defer into their plan if they know they have access to it. Or do does an employer say, you know what, We already have hardship. We already have loans, a loan you're supposed to pay back and get that money back into the plan. So we're hearing conflicting, you know, input from employers. Now, back to this one for a second, that it is capped at 2500, but it is part of your Roth deferral amounts. If you do take out 2500 out of this little sub account, you can't take another emergency withdrawal until that account is back up to 20 $500 by either putting money into the plan or repaying it into the plan. So once you take out that 20 $500, let's say we start repaying it now I have access to that money again. One of the downsides to an adviser is that the first four withdrawals must come out. The free no fees are permitted to be assessed against the first four or withdrawals from pursuant to this emergency savings account. So, you know, another thing to really kind of wrestle with, and we've got till next year to figure it out.

Speaker 3: We have heard very little about this honor in embroidery land we just had. I think it's too low and I think it's geared more towards high net worth people who don't need it, who can set aside 2500. But, you know, stay tuned, Will. We'll learn more. I mean, it's another one that's not that clear, even though it's effective. One 124. We have not heard a thing about one client asked a question about it. That's it. I was kind of surprised that.

Speaker 2: Yeah, Tim, I agree. We're not hearing a lot about this. We are bringing it up when we're going through the changes with the plan sponsor. But so far I don't even think plan sponsors are keen on this. There's too many other things insecure to point out or worry about right now.

Speaker 3: Right.

Speaker 1: Not that that makes sense. You know, one more kind of major topic. I like to cover that. I think I think would be good and, you know, not applicable immediately but come in in the very near future is kind of around collective investment, trust and synapses. You know, to maybe I'll kind of start off with you but right so secure to auto had some provisions in there around adding these to for two or three days but we know it's not quite everything we need to make that happen. So you know Tim, maybe I'll start with you and then Sue, I'd love to get your thoughts on this. Ah, you know, what do we know about these? And for three is expanding the ideas. What's happening? What's on the horizon? Sure.

Speaker 3: Well, my personal opinion not to be quoted is that this staff did a bad job on this. They just left things out that they should have had in there. So now they're trying to fix it. There's a new bill in Congress. It's called the Retirement Fairness for Charities and Education Act that's going to supposedly fix citizen investments. I mean, frankly, we're in the city business, not a commercial, but we're seeing significant, I'm sure you are, to request for more and more cities to replace current mutual fund lineups. We see that it's getting some good traction within Congress. We work well almost on a weekly basis. We're trying to find out where it stands and we're getting some good information. I expect to have more detail about where this stands next week after we finish talking to our lobbyist and some legal work we have been done down there. So I will send it out to all the attendees. But we see it as something that's going to be fixed. It's just, you know, taking longer than it should. But we feel good that something will be done before the end of the year that will address it because it's important. A It's a less expensive. It's it's an equality thing. And we see it as, you know, an important part of our retirement business. Why not have a forestry, be provider, start a plan, have access to the same thing, a41k plan. So we see we see it as something that was missed, but we do see it as a bipartisan approach to getting it passed through Congress before the end of the year. So do you have anything to add on top of it?

Speaker 2: Well, I have to tell you, this was my baby at the end of last year. And, you know, apparently, there's been some pushback from some industry investment providers on this because actually secure 2.0. I had the securities language in there. And then right before it was enacted, they took it all out. That now has been you know, as you said, Tim, we have a bill. We actually have another bill in the House there. The acronym is recoup some. I have to read this recovering executive comp obtained from unaccountable practices. And that was you know, we knew to get to make this right, it has to be passed in a banking bill unless Congress does something else. That would be the banking bill or something similar to that with the House and Senate hopefully agreeing on. There are other provisions for the banking changes and then the city securities language would be added. One of the two, the House or the Senate, has added the security law, Cross cross-references, The other has not yet, but we've heard they're going to. So I feel pretty confident if we can get a banking bill around that, cities will become available to for three days. And then, you know, it will depend on the final language. But we may get other investments for 43 bills that are not necessarily act already mutual funds. So it may go a little bit further than that saving right now. We won’t know until it acts. The actual language passes. But I think this is a great addition and I wanted it last year.

Speaker 3: It sounds like it's one of those you have to pass it before we can even read it. So.

Speaker 2: Exactly. Exactly.

Speaker 3: Great.

Speaker 1: Great, great. Anything else? Before we move on, we all saw that there.

Speaker 3: Was selling than we see significant amounts of more and more sites being formed. Mhm.

Speaker 1: Yeah. Yeah. I'll, I'll second that same right where it's a few extremes. I'm sorry. Go ahead.

Speaker 2: Now I was just going to say that it's just a comment because we've gotten this question is remember that I'm 43 BS If we're dealing with a church plan, a true steeple church or a qualified church controlled organization, which is a religious organization that isn't really a church, but it's affiliated with the church and meet certain rules, they can have cities right now. So there is no restriction on what those type of entities can invest in. They go outside of the realm of for three BS. I've seen, believe it or not, some churches buy gold when they thought that was a good investment. So you know that they're the only 43b employers that can do that. But they can do it right now.

Speaker 3: That's funny.

Speaker 1: It. All right, We've got. Just starting to come up on time. So kind of wanted to start to close up a little bit. I'd like to just take a minute and just kind of kind of reiterate why this is important. I think everybody understands, right, that this is important. Obviously, there are a number of a large number of provisions that, you know, as you're a retirement plan advisor, you have to make sure that you're implementing and implementing appropriately and some that you want to talk to your record keeper, your plan's sponsor, about to see whether it makes sense for your plan and whether the record keeper will have that capability. But also, you know, we touched on this a little bit, Tim and Sue, about how, you know, there's stuff in here about, you know, emergency savings in different ways to get your money in and out student loans. And, you know, I thought this was about retirement, I think was the line that you had. And we're really seeing this kind of continue to accelerate the trend of the convergence of retirement and wealth together. As you know, no longer two completely distinct entities, but kind of one singular practice. And, you know, we're anticipating, you know, a large number of new plans and new participants and new assets coming into the space. And from an advisor perspective, right, this has a ton of opportunities for you to embrace this stuff. Again, there's going to be faster growth in these types of plans due to auto enrollment and auto escalation provisions and all these small business owners that are going to be starting plans. Now, that's an opportunity for the retirement plan focused advisor too, to help some of those folks with their wealth business. And it's an opportunity for the wealth focused advisor to start more in the retirement plan. So we're seeing more and more crossover into that space. And I think, you know, taking the time to make sure that everyone's understanding these provisions, what's in them and how best to implement them is, is going to really help you accelerate your business. So we've got a couple of minutes left, see if we can take a couple of questions. But I want to make sure I'm calling out and you have a copy of this presentation and we'll make sure we'll send one out. But Broadridge has a secure 2.0 author of Resources. So check out the QR code or the link in the presentation to our landing page, or we have a number of white papers on this topic. We've done a number of webinars. This is part of the Secure series where we focused on certain aspects and plan start up on one. We've taken a look at the secure provisions from a wealth advisor perspective, so definitely make sure to check all that stuff out. Our contact information is here as well, so if you have any additional questions, Sue to improve myself, please reach out. This session has been recorded and that'll be sent out to all of you within the next day or so. And I think as mentioned earlier and Tim, great call out here internally with our chat, but we've got a ton of great questions and clearly we didn't get to all of them. So we'll do our best to provide a follow up document. I'll answer as many of those questions as we can, because there's a lot of interesting things, a lot of complicated things and unknown things, right. That we're still working through. So, you know, in the final two or three minute, Tim, to kind of closing thoughts, maybe, Tim, I'll start with you.

Speaker 3: I want to take a little bit of a risk here. Some people are interested. Nancy Hyde came up with an idea or maybe we run a webinar further out where we go over some of these tricky questions just on a webinar. If people would find out of interest, maybe you want to indicate that in the in the chat. I don't know if we can do it because we have all kinds of legal stuff around it with Broadridge, etc. but maybe that's not a bad thing to consider. We are seeing a lot of broker dealer activity and they're looking to work with record keepers, particularly record keepers who want to do start up and small plans. We have a number of record keepers we're working with. If you are interested in working with us, just email myself or Michael. Happy to talk to you. And the other thing that's interesting would be we have some of these folks that are doing the start up plans, helping people through the tax code to get them the $5,000 credit. And that's been very that's been something that's been very successful so far in getting startup plans into the mix. So we can follow up further with that. But if you're interested in having further dialog with us about introducing record keepers, you want to be in that space. We're happy to have that dialog. That's what I had.

Speaker 1: Great thanks to Sue. Any closing words?

Speaker 2: I Michael, I think you actually said it. I. I always tell anybody in this industry, especially advisors, that I think it's critical that the advisor understand the best they can some of these things and the impact on their clients. Because the more you can explain to your client, the more services you can provide them, the longer you're going to keep that client. You know, and you probably know if you haven't yourself done it, that a lot of these firms are going out and sending things out to their clients to explain what has occurred in this in this law change you, the advisor, need to be the one doing that and understand, you know, the provisions.

Speaker 1: Great, great call out Sue. I want to thank Tim and Sue, both of you for joining on this webinar and presenting. I think it's been great, very informative and happy to have you here and I want to thank all of the attendees as well. Thanks for joining us today. Thank you for all the great questions and engagements and fantastic. Tim's idea seems to be a big hit in the Q&A. We've seen a lot of a lot of folks wanting that kind of question and answer session. So definitely we'll see what we can do to make that happen regardless. Stay tuned for more from broad range on security and auto. Check your inboxes for the recordings and follow up messages. And thank you again and look forward to seeing you at our next webinar. Thank you.