Within the space of three months, two major pieces of legislation were enacted—the SECURE Act and the CARES Act. A panel at an Oct. 27 session of ASPPA All-Access discussed these measures and the opportunities they offer service providers.
Justin Bonestroo, Senior Vice President, CBIZ Retirement Plan Services; Shannon Edwards, President of TriStar Pension Consulting; and Bill Presson, Executive Vice President, Sales and Consulting, EGPS Inc. offered their take on how these measures affect business practices and service models. Following are highlights of the discussion.
President Trump signed the Setting Every Community Up for Retirement Enhancement (SECURE) Act into law on Dec. 20. The sweeping measure makes many changes: among them, changes concerning the dates for required minimum distributions; new deadlines for plan adoption; higher penalties for not filing a Form 5500; allowing two or more unrelated employers to join a pooled employer plan; expansion of multiple employer plans; changes concerning part-time employees who are long-term staff members; and safe harbor notice relief.
And just three months later, as the pandemic began to hit hard, on March 27 President Trump signed the Coronavirus, Aid, Relief and Economic Security (CARES) Act into law. The $2.2 trillion stimulus bill includes provisions that make changes concerning distributions, change loan limits, provide RMD relief, address loan suspensions and provides the Department of Labor with expanded authority to postpone certain deadlines under ERISA.
With the changes these measures make and the ways business is conducted during the pandemic, there now is “an incredible opportunity for those who want to sell high-touch service to their clients,” said Presson. “There are things that just can’t be handled by e-mail,” he said.
For instance, Presson said, the changes that the SECURE Act and the CARES Act have made have “given us an opportunity to decide how you want to play a role in distributions,” said Presson. “Are you going to make a change? Are you going to get more involved?” he asked, suggesting that a service provider start asking itself such questions.
“We’re extremely involved in the distribution process,” said Edwards, adding that they are trying to encourage all of their clients to go online. “We’re consolidating practices and methodologies,” reported Presson. Another option, he said, is to create a benefit distribution department.
Technology
Technology is key to helping clients navigate the new laws, as well as the new business and social context. “We all have the opportunity now to go out and talk to the clients,” said Presson. He added, “this is an opportunity for you to teach your clients how to take advantage of that technology that they spent money on,” for instance by teaching them how to extract census data and how to send secure email. “They need us to explain things,” Presson said.
“We’ve changed so much this year,” observed Edwards, reporting that “in the last few months, we’ve revamped all of our technology. We’re completely cloud-based, we’re changing all of our cameras and systems. It has really changed what we do in the office and how we do it.” She cited Zoom as a means by which her firm has been able to interact with clients they have not heard from in years. “It helped us build relationships and deepen those relationships we already had,” she said.
Reach out and Touch
Presson advocated a “high touch” approach—using virtual and technological means—to serving clients and interacting with them. “High touch enables you to improve the relationship and hold conversations with your clients to work through which parts of these make sense,” he said. Presson suggested regarding this an opportunity to provide value and to signify to clients that one wants to guide them through application of these laws, and in a time in which the ways in which business is conducted are very different.
Presson argued that the changes ushered in by the SECURE Act, the CARES Act and the pandemic offer service providers fresh opportunities to do many things, such as:
- exercise greater control over their interactions with clients and over services they perform;
- teach clients how to use technology;
- control how to do distributions;
- change how one is paid by clients; and
- discuss restatements.
“Here is an opportunity to meet with a client, possibly get a new service agreement,” Presson said, adding, “we’ve got to make it easy for clients to hire us and pay us.”
“Current changes have given us a chance to deepen relationships,” Edwards agreed, adding, “we still have to provide value.” She said that her practice has seen contact with clients increase concerning the CARES Act, and that they reached out to clients rather than follow the approach of other service providers that simply opted participants in. “That’s why we’ve stayed local,” she said—they want to interact with clients. “We consider them members of our family,” Edwards said.
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