401(k) Specialist Issue 1 - 2024 - 39

401(k) PROVIDER PERSPECTIVE
believe that the provisions of the legislation
establish meaningful separation from
retirement funds and should achieve their
desired policy objectives, over time.
4. Saver's Match
Of all the retirement initiatives discussed
thus far, the Saver's Match may wind up
positively impacting the most minority
savers, over time. Scheduled to replace the
Saver's Credit for the tax years following
2017, the Saver's Match allows for qualified
individuals participating in a retirement
plan or contributing to IRA to receive a
50% federal matching contribution up to a
maximum of $2,000 ($4,000 for if married
filing jointly), deposited directly into the
taxpayer's IRA or retirement plan.
A cursory examination of IRS tax filings
and W2 data suggests that tens of millions
of tax filers with qualifying adjusted gross
incomes could be eligible to receive a
matching contribution from the federal
government, every year.
Given the income segments eligible to
claim a matching contribution, there's solid
reason to believe that the Saver's Match-
like auto portability-could disproportionately
benefit minorities. While research on
the benefits of this initiative is evolving,
a November 2023 DCIIA Academic Forum
showcased research from the Collaborative
For Equitable Retirement Savings (CFERS), a
joint endeavor by DCIIA, Morningstar and the
Aspen Institute's Financial Security Program.
That research, presented by Morningstar's
Jack VanDerhei, modeled two Saver's Match
scenarios that projected substantial increases
in the ratio of plan account balances vs.
salary, across race and gender categories.
While every cohort realized significant
benefits, minorities and women benefitted
the most.
I believe it's a good bet that additional research
on the Saver's Match will confirm that
the benefits to minorities will be substantial.
The Importance of Plan Sponsor
Action
This time of year, as we observe Martin Luther
King, Jr.'s birthday, followed in February
by Black History Month, we have an opportunity
to consider actions that we can take to
promote equality for America's minorities.
To that end, policymakers and industry
stakeholders have led the way in moving key
retirement initiatives forward that set the stage
for making real, quantifiable differences in
closing America's racial wealth gap. Moving
forward, it will be retirement plan sponsors
that will drive change by fully embracing these
initiatives, generating more minority wealth,
and enhancing retirement security for all.
Tom Hawkins is Senior Vice President, Marketing
and Research with Retirement Clearinghouse.
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ISSUE 1 2024 | 401kSpecialist.com
39
Issue 1, 2023 |
401kSpecialist.com
Fiduciary | Rollovers | Client Acquisition | Practice | Investments | HSA
George Fraser and Shlomo
Benartzi explain how reframing
saving decisions is changing
the lives of 401(k) participants

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401(k) Specialist Issue 1 - 2024

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