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The NAGDCA News - Winter 2018
Published on : Wednesday, January 17, 2018


Keith Overly

As we welcome a new year, I anticipate that 2018 will be an eventful year for plan sponsors. Hopefully you saw several legislative updates in November and December regarding tax reform. If not, the good news is that defined contribution plans came out unscathed. A final “thank you” to Susan White who retired as of December 31, but was actively involved with our new Director of Government Affairs Paul Beddoe advocating up to the final passage of the tax reform bill by the Senate and the House. Stay tuned for more information from Paul Beddoe as there could be an additional push for legislation that could impact defined contribution plans in 2018.

The newly formed Benchmarking Committee is underway. Thank you to all who volunteered for the committee. A new survey will be available in March 2018 and we encourage everyone to work with their service provider to complete the survey. Those who participate will be eligible for a drawing for a free NAGDCA membership and will have access to the online portal to create customized peer group reports for their plans.

Cybersecurity has become a major issue for plan sponsors and recordkeepers as so much personal data has been stolen and used for various types of crimes. We are now seeing increasing fraudulent attempts to withdraw assets from defined contribution participant accounts. NAGDCA recently promoted two cyber security webinars by the Society of Professional Administrators and Recordkeepers (SPARK) to raise awareness of the threats and to encourage the use of new best practices to mitigate data breaches and fraud. I was encouraged to learn that most of the persons that registered for the SPARK webinars were NAGDCA members.  The Board will be considering other opportunities this year to raise awareness and to assist plan sponsors in countering cybersecurity threats.    

Be sure to mark your calendars and plan to attend the 2018 Annual Conference in Philadelphia from September 23 to September 26.

Keith Overly, Executive Director
Ohio Deferred Compensation

2018 Annual Conference Theme & Topics Announced
The Annual Conference Committee is busy planning for the 2018 Annual Conference in Philadelphia, PA, which will focus on Winning Practices & Innovative Applications. This year, attendees will learn from those both within and outside the NAGDCA membership regarding current best practices and how those practices are being applied in innovative ways. The conference will cover a wide range of topics including: cybersecurity, generational communication campaigns, investment lineups, automatic enrollment features, decumulation efforts, lifetime income products, holistic retirement, retirement income, and more!

You don’t have to wait until September to learn about best practices! NAGDCA has many resources readily available to members that explore industry best practices. Click here to access NAGDCA’s best practices publications. The discussion board on the NAGDCA Network is another great resource where members can post questions and gather feedback from peers all year long. 

2018 Annual Conference Sponsorship
NAGDCA invites you to sponsor the 2018 Annual Conference in Philadelphia, PA. We appreciate and rely on the generous support of our industry partners. The opportunity to sponsor is limited to current NAGDCA Industry Members. For a complete list of the conference sponsorship packages, click here.

To purchase a 2018 NAGDCA Annual Conference sponsorship, please sign in using your credentials and visit the NAGDCA online store. Please choose the sponsorship level desired and add it to your cart. After proceeding to checkout, you may choose the "Bill Me" option to pay by check or pay by credit card.

*Sponsorships are only available for purchase by the primary member of each company. If you would like to purchase a sponsorship and you are not the primary member, please contact Liz Fossett (contact information below).

*All sponsors must adhere to NAGDCA's Industry Member Code of Conduct. Please review those policies here prior to purchasing a sponsorship. 

If you need purchasing or login assistance, please contact Liz Fossett at or (859) 402-9809. 

ANC Scholarship Now Open
Applications are now being accepted for the 2018 Arthur N. Caple Scholarship Awards program. Click here for more information. Click here to donate to the scholarship program. 

The Overlooked Persistence of Active Outperformance
Contirbuted by: Neuberger Berman

With stock markets fueled by extraordinary central bank intervention in the wake of the Great Recession, passive equity strategies have seen great success in terms of performance, fun flows and press coverage. Often overlooked in the haste to declare a victor in the active/passive debate, however, is the fact that active outperformance has persisted across a wide swath of managers over various time periods and market regimes.

Click here for the full article. 

Target Date Funds: A Real Solution or Just False Security?
Contributed by: GuidedChoice

Whether you're a plan advisor or plan sponsor, you have the same goal: improving participants' financial wellness. An essential facet of reaching this goal is helping them plan for retirement.

In the past, this usually meant utilizing a target date fund (TDF). 

However, there are many reasons this popular choice is worth reconsidering, especially in the light of the many benefits provided for managed accounts. 

Click here for the full article. 

by Paul Beddoe, NAGDCA Government Affairs Director

January is always a good time to evaluate our achievements over the previous year and to sharpen our focus on our goals for the coming year. With that in mind, here are three takeaways from NAGDCA’s 2017 legislative program and three things we are watching closely in 2018.

"Unscathed" in Tax Cuts and Jobs Act of 2017
As NAGDCA President Keith Overly mentioned in his column, governmental defined contribution plans emerged from the debates over the tax bill without any of the adverse provisions that we had opposed. Rothification was never included in any of the versions of the bill. The initial Senate Finance Committee draft did repeal the 457(b) exemption from the ten percent penalty for early distribution and some other so-called consolidation provisions, including eliminating special catch up rules. NAGDCA and our coalition partners worked with allies on the committee, including Sen. Rob Portman (R-Ohio) and Sen. Ben Cardin (D-Md.), to get these sections stripped out as the bill moved through the process. The final adverse provisions were struck at the insistence of Sen. Susan Collins (R-Maine), whose vote on the final bill was being anxiously courted by Senate leaders.

Preparation was Critical
While we certainly dodged a bullet, the outcome makes it clear that planning and preparation paid off. NAGDCA has built strong relationships with key policy makers on the Hill over the years. These good relationships, in turn, resulted in the open lines of communication which enabled us to ramp up our advocacy and form coalitions around potential Rothification and plan consolidation, months before any legislative proposals were released. Moreover, NAGDCA had also done its research homework and was able to offer congressional staff national data illustrating how various proposals could impact our plan participants. While the final stages of debate on major legislation are almost always chaotic and unpredictable, NAGDCA’s preparation laid the groundwork for success.

Grassroots Engagement is the Secret Sauce
Over the course of the year NAGDCA has encouraged its members to communicate with their own federal representatives and senators. You have sent letters modeled after the NAGDCA priorities letter to your Members of Congress and Senators, you have spoken to them when they visit your communities, you have engaged them around National Retirement Security Week and your Executive Board has conducted in-person visits to their offices in Washington, DC. It is no accident that your NAGDCA President was in constant contact with his congressional delegation, including Sen. Portman, whose support ultimately proved to be decisive. We could not have achieved what we achieved without that support. If you have not engaged as a grassroots advocate for NAGDCA consider stepping up and participating this year. They care what you think – and it really makes a difference.

Will Congress Pass a Budget with Tax Policy Instructions?
The calendar says it is 2018, but on the Hill, it is still 2017. With the healthcare and tax debates consuming so much of Congress’ time last year, they kicked a number of key items of regular business down the road, including the annual appropriations bills that keep the government running and reauthorizing the Children’s Health Insurance Program (CHIP), a popular bi-partisan program. When they wrap up these issues we will see if the Republican majority decides to write a budget blueprint for the coming year and whether or not to include special instructions to the tax writing committees that could open up changes to the Internal Revenue Code and potential changes for defined contribution plans. Stay tuned!

Could a Bipartisan Retirement Bill Gain Traction?
Despite the hyper partisan atmosphere in Washington, especially as we head into the 2018 midterm election season, we are hearing some murmurs that there may be an appetite to develop a package of improvements to various retirement plans that could conceivably attract bipartisan support. NAGDCA’s Legislative Committee and Executive Board will be refining our legislative and policy priorities over the next few weeks, with a view to maintaining an appropriately vigilant posture regarding potential threats, while offering positive proposals to improve the effectiveness of our plans and the retirement security of our participants.

Are We Ready to Fight the Zombies?
Speaking of being vigilant, we should remember that in Washington, no bad idea ever really dies. Especially ideas like Rothification, that could be projected to save the U.S. Treasury some money in the short term (and thus help pay for some other legislation) or plan consolidation, which might make sense from an academic perspective but create chaos in practice. Going forward we must build on our success but also be ready to push back should any of these proposals come back.

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