What Advisors Really Think About the Secure 2.0 Act: Survey

Financial Advisors

Advisors are optimistic, but disagree about what 401(k)s annuities will look like in the near future.

Passage of the Legislation to Prepare All Communities for Enhanced Retirement (Safe) 2.0 in the second half of 2022 is a relatively positive sign in an increasingly polarized political landscape.

The new law, which follows the Safety Act signed into law at the end of 2019, includes a range of provisions aimed at improving the retirement outcomes of Americans. While many of the provisions are aimed specifically at defined contribution plans, they also have varying implications for financial advisors who do not work directly with plan sponsors, given the potential impact on customers.

This article reviews the results of a recent Prudential survey of 245 U.S.-based financial professionals conducted online on January 30, 2023, and explores how financial advisors feel about the bill. We focus on three questions that provide background on whether

In summary, financial advisers are cautiously optimistic about long-term benefits, but they are very divided on whether there will be a significant increase in the availability of pensions in defined contribution plans.

Positive Expectations for Outcomes After Retirement

When asked how much they expect Secure 2.0 to help their clients reach their retirement goals, advisors were optimistic.

In other words, advisers hope the bill will improve retirement outcomes. This is not necessarily surprising, given the increased catch-up contributions of 401(k)s, the delay in required minimum distributions, and the increased coverage (i.e., participants) of corporate-sponsored defined contribution plans.

Expected to have a positive impact on the work of financial advisors

Financial advisors not only expect Secure 2.0 to improve their clients’ retirement outcomes, but also expect the legislation to have a moderate to large positive impact on their clients’ operations over the next 12 months, as shown below. I hope to give too.

Financial advisors surveyed were overwhelmingly positive about the potential impact, with 62% moderately or mostly positive, while only a few said it was moderately or mostly negative. was 5%. Financial advisors clearly see the Secure 2.0 Act as a way to engage with their clients, help them produce better results and demonstrate the value of financial planning.

Different Perspectives on Pension Growth in 401(k) Plans

The Secure 2.0 Act has many provisions for 401(k) plans. While the original safety law was more focused on annuities, including the introduction of trustee safe harbors, version 2.0 introduced higher limits on Qualified Longevity Annuity Contracts (QLACs) and combined annuity and annuity payments. and other updates have been added. 401(k) plan for calculating RMD.

Financial advisors have mixed opinions about the extent to which Secure 2.0 will drive improved pension availability and utilization in the US retirement plans in the near future. The document below contains responses to a question asking whether the advisor agrees that Secure 2.0 will transfer 20% of his U.S. retirement pension assets to pensions within the next 12 months.

We can see that the distribution is very mixed, with roughly equal numbers of respondents agreeing and disagreeing with the pension-centric growth perspective.

Perhaps the most interesting of these responses is that there is no relationship between the perceived impact of DC plans on pension utilization and whether financial advisors use them. In other words, responses that agree or disagree with expectations are not biased by whether the financial advisor uses an annuity. Responses are all over the map.


Financial advisors have somewhat mixed views on Secure 2.0 legislation, but generally see opportunities for themselves as well as their clients. Therefore, it is considered a wise choice to familiarize yourself with the provisions of the Secure 2.0 Act.

David Blanchett is the Managing Director and Head of Retirement Research for PGIM DC Solutions.

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