Products January 26, 2023

SageView Launches Financial Education Platform for Participants

One of the country’s largest independent retirement plan advisories taps Kerry Woods to lead a new financial readiness platform to provide financial planning services for retirement plan participants.

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SageView Advisory Group LLC has launched a financial education and engagement platform for participants of its retirement plan sponsor clients, the company announced Thursday.

PersonalSAGE, which stands for Strategic Advice, Guidance and Empowerment, is designed to give participants of any savings level access to a personalized assessment of their financial standing and access to one-on-one sessions with financial coaches, according to the announcement. Participants have access to coaches through a website; virtual and in-person education sessions; and an online technology platform created by SageView and technology partner LifeCents.

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The creation of a financial advice platform for participants who often do not meet the minimum threshold for personal financial advisers is in line with a strategy CEO Randy Long laid out for PLANADVISER in a December 2022 interview. Long said at the time the firm was focused on acquiring RIAs with a strong background in holistic financial wellness, serving clients that are not just high-net worth individuals.

PersonalSAGE will be led by Kerry Woods, new vice president of participant education and engagement for the Newport Beach, California-based registered investment advisory and retirement solutions firm. Woods is joining SageView from a position as vice president and consultant relations director at Voya Financial. She is the most recent of many hires since the firm announced a partnership with private-equity firm Aquiline Capital Partners in January 2021.

“I’ve seen firsthand how a lack of financial education can impact generations of families, so this initiative is extremely important to me,” Woods said in a statement. “PersonalSAGE is the next evolution of our offering for participants and provides holistic financial readiness beyond just education. The ability to sit down one-on-one with a financial professional, share your financial goals and struggles, and receive actionable, personalized advice is crucial to improving participants’ financial outcomes.”

SageView has more than $150 billion in retirement plan assets and $4 billion in wealth management through both acquisition and organic growth, according to the firm.

Compliance January 25, 2023

SECURE 2.0 Error Threatens Catch-Up Contributions, but Meaning Is Clear

A mistake in SECURE 2.0 legislation would eliminate both future and existing retirement plan catch-up contributions, though IRS interpretation to keep the rule as intended seems possible.

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There’s an apparent error in the retirement reform section of the 4,000-page omnibus spending bill passed by Congress by a thin margin in December 2022.

A paragraph was omitted from the SECURE 2.0 Act of 2022 that technically eliminates reforms to allow pre-tax and pre-existing after-tax catch-up contributions to retirement plans. The issue was identified by the American Retirement Association, according to a story Tuesday from its partner organization, the National Association of Plan Advisors. The ARA has alerted the U.S. Department of the Treasury and the Joint Committee on Taxation, NAPA noted.

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While the omission of a certain section of the bill creates a potential error, there is also clear intention to allow for catch-up contributions going forward in 2023 and 2024, according to David Levine, co-chair of the Groom Law Group’s plan sponsor practice.

The attorney points to page 933 of the bill, which amends Section 414(v) of the Internal Revenue Code for elective deferrals, noting that certain employer retirement plan deferrals must be Roth contributions for those with wages above $145,000. The intention is clear enough from the bill that Levine said he thinks the IRS can operate with the assumption that catch-up contributions are possible via the existing 414(v)(1) policy.

“Legislation would be beneficial to clear this up, but we can make an argument that it isn’t required,” Levine says. “Of course, it would be great to have everything buttoned up.”

SECURE 2.0, which built on the Setting Every Community Up for Retirement Enhancement Act of 2019, was intended to allow pre-tax catch-up contributions by those making less than $145,000 in wages, giving Americans more of a chance for pre-tax saving. In seeking to make that adjustment to align with the Internal Revenue Code, a section was deleted from the final version of the law that not only eliminates pre-tax contributions, but also related Roth contributions.

Levine notes that there is precedent for the IRS to make a special provision when a bill appears to have been misrepresented. He refers to a case in 2006 when there was confusion as to whether a government retirement plan could make a nontaxable contribution of up to $3,000 to a retired public safety officer’s accident or health insurance plan. As written, the law may have allowed the money to go directly to the officer or dependents, but the IRS provided special provision 402(l), confirming it should go to the insurance plan directly.

The catch-up contribution rule is scheduled to go into effect in 2024; a correction would need to be passed by a Congress even more divided across party lines than when the omnibus bill passed with a 225 to 201 vote, with one member voting present.

“Congress spent a lot of resources and personal capital to get SECURE 2.0 through,” Levine notes. “Things don’t move as fast as you might hope, even though retirement is an area of consensus.”

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