How Retirement Committees Can Review Retirement Income Products and Services

How Retirement Committees Can Review Retirement Income Products and Services (9:35) Under ERISA, Investment Committees are Fiduciaries and Must Act Solely in the Interest of Plan Participants and BeneficiariesBroadcast Retirement Network's Jeffrey Snyder discusses how to wade through all the different retirement income products and services with Andy Larson, Retirement Learning Center and Daniel Long, Doubleline Group, LP.Jeffrey Snyder, Broadcast Retirement NetworkThis morning on BRN, how can retirement committees review retirement income products and services? We're going to welcome back to the program Andy Larson of the Retirement Learning Center and welcome to the program Dan Long of Double Line Guru. Andy, always great to see you.Thanks for joining us this morning. And Dan, great to see you. Thanks for joining us.Good to see you. Glad to be back. Yeah, you know, and I love covering these things with you, Andy, and it's always great to bring in an industry expert like Dan, and we're going to talk to him in a minute.But, you know, my first question to you, Andy, is when you think of hurdles, what is or what are some of the hurdles for committees determining a path forward on addressing retirement income needs for their plans and their participants?Andy Larson, Retirement Learnign CenterReally, I think there's two. From a strategic perspective, I think most plan committees view the 401k as an ancillary plan, as the 401k was originally intended. That's just not the case today.Most organizations don't have defined benefit plans, which in effect means the 401k becomes the primary plan. It becomes the pension, to use that term. Committees aren't thinking of the 401k in that context.Once they do. Then I think the ERISA standard of operating that plan in the best interest of the participants should come into play as really the first step to get committees aware of potentially the need to at least explore retirement income products.Jeffrey Snyder, Broadcast Retirement NetworkWell, Dan, it is great to meet you again. Thanks so much for joining us. Always great to get another industry perspective.So I think Andy brings up some great points about the perspective of committees. But let's talk for a minute about the retirement income product set that exists today. It continues to evolve.What does it look like today in 2024?Daniel Long, Doubleline, LPYeah, the product set looks pretty diverse, right? From my opinion, there's a lot of old products out there right now. Really good ones, too.I call them old, but they're still really good. And there's a new one almost every day, Andy, right? I mean, we kind of see these alerts coming out.So it's evolving really quickly, this product set. But I think what needs to happen, too, is that Andy alluded to starting a process that the product evolution has to match the process evolution. You can't really dive into all these complex products unless you have a really good process.And I think, Andy, you said these plans are really in an interesting place. Yesterday, the Treasury just announced this new program, right, for the financial inclusion plan. I mean, I think two or three of the five bullets had workplace plans at the center of it.So, you know, these products are coming. They're there now. They're evolving fast.But that process has to evolve just almost as quickly with it.Jeffrey Snyder, Broadcast Retirement NetworkYeah. And just to follow up on that, Dan, are committee members, and by that I mean fiduciaries, are they able to differentiate? Because you're saying it's going at a fast velocity.And that's great because you want a marketplace with lots of different ideas, lots of different products. But are the committee members and fiduciaries able to differentiate the products and how they could apply to their plan? And more importantly, how the participants can differentiate them as well?Daniel Long, Doubleline, LPYeah. I mean, I think, you know, it's always this process. So, Andy and I have these conversations and it's the process, right?It's kind of like, you know, know your plan, know the tradeoffs, and then follow a path. You know, and then if you know your plan, you really know, you know, you can hit that retirement income market to see what actually the plan should select. So, to kind of help clients distinguish between what they can select, you know, really differentiate between products and services, you know, to keep going down the line, you know, you have to have a comparison process.You know, put the products in one spot, come up with some criteria, analyze them. Put the services in another spot, come up with some criteria, and analyze them. And I think, you know, kind of what we say, you know, is a way to simplify it is products are red, services are blue, retirement income solutions are purple, you know, now we know what to do, right?And it kind of makes it simpler, makes the complex a lot more simpler to talk about. And kind of breaking it up into kind of big buckets like that and using colors makes it simple. You know, and that just kind of helps make sure you know what products and services are out there so that you can find the ones that actually fit the plan like Andy was just talking about.Jeffrey Snyder, Broadcast Retirement NetworkI like that saying. It takes me back to my childhood. Roses are red, violets are blue.Instead, put it in the construct of retirement income. I think you got I think you got something there. And maybe if we could teach third graders about this, we wouldn't have a future problem about retirement income.But we'll talk about that later. Andy, I want to get bring you back in on this, because a lot of the the individuals that typically help committees are consultants, advisors. And I guess, you know, you and I thematically have talked about education.Are these groups consultants, advisors, retirement plan advisors, however you want to find it, are they educated? Do they have the background and the education that to help? As Dan was saying, help the roses are red or not roses red, but help the committees make these decisions and differentiate these products.Andy Larson, Retirement Learnign CenterI don't want to with my answer, I don't want to paint with too broad of brush. However, I do think that many of the advisors, many of the consultants out there, as all of us, we are prisoners of our own experiences. We have not talked about retirement income.We have not talked about the 401k being the primary plan. We haven't been involved in selection on products and services. And because we're prisoners of our own experiences in terms of not focusing on retirement income, we generally don't.There are, in my experience, anecdotally, getting to be a few that are starting to embrace this. That doesn't mean they're advocating retirement income products, but at least they're embracing the notion that the 401k is the primary. And maybe that means we operate the plan differently than we've done in the past.Jeffrey Snyder, Broadcast Retirement NetworkYeah, really good point. And Dan, just to kind of close out this part one of our conversation, you're out talking, you know, as a person within the retirement industry, someone who's a senior person, you're out talking to these exact individuals, consultants, advisors. I want to get your perspective on this.How do we take this information and boil it down into digestible bits to vis-a-vis help the committee understand the decisions it needs to make and maybe prioritize retirement income?Daniel Long, Doubleline, LPYeah, it's interesting, right? Each plan is going to do that differently. There's, you know, each process is going to look a little different, you know, depending upon kind of your advisor and your providers that you're working with, your plan, what it needs.You know, I think it just goes back to that path, right? That path needs to be repeatable. That process needs to be repeatable.You know, it has to be aligned to objectives, aligned to the plan demographics. The toolkit that we provided, it actually creates that sample evaluation, you know, process. You know, by making all retirement income alternatives purple, you know, retirement income is holistic.Everybody knows that. It comes from in the plan and out of the plan. It comes from guaranteed and non-guaranteed.It comes from fiduciary and non-fiduciary. It comes from plan, in the plan and out of the plan. That really captures all retirement income, you know, that's out there.To help committees, though, you really have to show them a process of how to break it up. So that's what we did. Products are red, services are blue, everything's purple.But once you create those buckets, that's when the process can really start to heat up. And people really start to understand what they're buying because they're comparing the trade-offs between the products in each of those respective, you know, buckets. I think that those are some of the early steps in the process that you need to happen before you get too far down the path to actually pick, you know, products and services.But I think that's kind of a lot of what the early steps of a fiduciary process will look like.Jeffrey Snyder, Broadcast Retirement NetworkAnd that's a perfect segue, Dan, to tomorrow's part two of our conversation, where we will be talking more about the fiduciary process. Dan, Andy, so great to see you. And look, we look forward to having you back on the program tomorrow to pick up the conversation.Thanks. Thanks. Take care.And don't forget to subscribe to our daily newsletter, The Morning Pulse, for all the news in one place. Details, of course, are at our website. And like I said, we're backing in tomorrow with Andy and Dan to pick up the conversation.Until then, I'm Jeff Snider. Stay safe, keep on saving. And don't forget, roll with the changes.