Rick Irace Discusses the Importance of Education to Help Close Retirement Savings Gap

In a recent PLANSPONSOR feature, Rick Irace, COO for our Retirement division, shares insights from Ascensus’ Retirement Outlook Tool and discusses employers’ opportunity to close the education gap on retirement planning. In 2018, 19% of Ascensus plan participants who used this tool found that they were on track to meet their savings goals. To help address this readiness issue, “plan sponsors should focus on educating employees on the fundamentals of their plan,” states Irace. “For younger generations of employees, many plan sponsors and financial advisers also find it useful to highlight why it makes sense to start saving now, even if it’s at a very modest rate.”

Our data suggests that simply being more engaged with their retirement account website is correlated to higher savings outcomes for participants. “A saver who logged into our participant website at least once in 2019 shows an average 401(k) account balance 25% higher than a saver who has not logged in since 2018, 46% higher than one who has not logged on since 2017, and 67% higher than one who has not logged on since 2017,” he added.

NAPA Names Two Ascensus Regional Vice Presidents to 2019 Top 100 Defined Contribution Wholesalers List

Jeff Simes and Matt Spicer, AIF®, PPC™ Recognized as Leading DC Wholesalers, as Voted on by Thousands of Retirement Plan Advisors

Dresher, PAAscensus—whose technology and expertise help millions of people save for retirement, education, and healthcare—announced that two regional vice presidents, Jeff Simes and Matt Spicer, AIF®, PPC™, have been named to the sixth annual list of NAPA Top 100 Defined Contribution (DC) Wholesalers by the National Association of Plan Advisors (NAPA). This represents a second win for Spicer, who was previously named to the 2017 edition of the list. 

The finalists for this year’s list, which recognizes the top recordkeeping and Defined Contribution Investment Only (DCIO) external wholesalers, were selected by thousands of retirement plan advisors from a list of more than 600 wholesalers nominated by NAPA Firm Partner recordkeepers and DCIOs.

According to NAPA, the award winners—referred to as the “Wingmen” for consistently having the backs of their advisor clients—represent the top 7% of an estimated 1,400 recordkeeping and DCIO external wholesalers throughout the country.

“Being named among NAPA’s Top 100 DC wholesalers is a huge accomplishment and a well-deserved recognition of Jeff and Matt’s efforts to go above and beyond for our partners and their retirement plan clients,” said Jason Crane, head of retirement distribution at Ascensus. “Congratulations to them both from the whole Ascensus team. Their work is an excellent example of the value and expertise we strive to deliver to all those saving for their future retirement, and representative of the talent we have across the broader organization.”

The complete 2019 Top 100 DC Wholesalers list is available on NAPA Net and will be published in the fall issue of NAPA Net the Magazine.


About Ascensus

Ascensus is the largest independent recordkeeping services provider, third-party administrator, and government savings facilitator in the United States. The firm delivers technology and expertise to help millions of people save for what matters most—retirement, education, and healthcare. For more information about Ascensus, visit View career opportunities at

Second Lawsuit Filed Against SEC Investment Advice Rule

On September 11, 2019, XY Planning Network filed a lawsuit against the United States Securities and Exchange Commission (SEC) to invalidate its new fiduciary standards, known as the Regulation Best Interest Rule. The plaintiffs argue that the regulation fails to meet standards imposed under the Investment Advisers Act of 1940, and frustrates the intent of the Dodd-Frank Act.

The lawsuit argues that the SEC rule imposes a different standard of fiduciary responsibility for broker dealers than it does for financial advisers who might be selling the same or similar products. Financial advisers are held to a standard that the advice they provide to clients must be in the client’s best interests, but broker-dealers are not held to this same standard when providing advice. This is because broker-dealers are considered to be in the business of selling financial products rather than financial advice. The plaintiff claims that the new rule makes this distinction less clear, and as a result, “the rule thus circumvents a key goal of Dodd-Frank—leveling the playing field—and increases investor confusion.” The plaintiff claims it will be financially harmed as a result of the rule. The plaintiff represents over 1,000 financial advisers who expect to lose business to broker-dealers who are subject to the less stringent standards.

The lawsuit comes shortly after seven states and the District of Columbia filed a similar case seeking to invalidate the SEC rule. The SEC has yet to file a response in either case.

DOL Rules HSA Contributions Generally Are Not Wages for Garnishment Purposes

The Department of Labor’s (DOL’s) Wage and Hour Division has issued an opinion on whether contributions to an employee’s health savings account (HSA) can be considered wages for purposes of garnishment in a Consumer Credit Protection Act (CCPA) legal action. The DOL’s opinion notes that the applicant requesting the letter sought it out of concern that wage garnishments of employees who are receiving HSA contributions may be “withheld in error and in excess of CCPA limits” that define wages that are subject to garnishment to satisfy certain debts.

In Wage and Hour Opinion Letter CCPA2019-1, the DOL ruled that contributions to an employee’s HSA generally would not be considered wages for purposes of garnishment as long as the amount of such contributions does not vary based on “the amount or value of [the] employee’s services” to the employer, and the employee does not have the option to receive the amount in cash instead of as an HSA contribution (as in a 401(k) plan deferral election).


States File Lawsuit to Invalidate SEC Investment Advice Rule

On September, 9, 2019, seven states and the District of Columbia filed a lawsuit seeking to invalidate the recently announced Securities and Exchange Commission (SEC) investment advice rule. The Regulation Best Interest Rule, which is currently scheduled to be implemented by June 30, 2020, increases disclosures that must be provided to investors, but preserves many existing industry practices, such as the ability for brokers to use a commission-based sales model.

The plaintiffs contend that the rule undermines existing consumer protections because it will permit brokers to market themselves as trusted advisers while actually engaging in conflicts of interest that may harm their clients. The plaintiffs contend that practices such as sales contests, which they argue represent an obvious conflict of interest, are still permissible in many circumstances under the regulations.

Additionally, the plaintiffs argue that the rule causes confusion about which standards might apply when consumers are seeking investment advice. The regulations allow for different standards of advice to apply to investment advisers than those standards that apply to broker-dealers. The plaintiffs cite evidence from an SEC study that retail investors do not understand the difference between these two classifications, and the separate standards to which they are held.

The Dodd-Frank Act required the SEC to study where regulations are weak, and enact necessary changes to improve regulations to protect retail investors where necessary. The legislation also authorized the SEC to create regulations which would ensure uniform standards of investment advice applied to broker-dealers and investment advisers. The plaintiffs argue that the SEC ignored the conclusions of its own study, which demonstrated the need for a more robust regulation than what was actually proposed, and for rules which apply equally to both broker-dealers and investment advisers. For these reasons, the plaintiffs are asking the U.S. District Court for the Southern District of New York to hold the SEC regulation invalid.

Peg Creonte Shares Data on Use of 529 Savings for K-12 Education

In a recent USA Today feature​, Peg Creonte, SVP of business development for our government savings division, shared insight on the usage of 529 account savings for education expenses for beneficiaries in kindergarten through 12th grade. Ascensus data suggests a minor jump in the overall percentage of qualified 529 withdrawals made for beneficiaries ages 16 and under, at 5.5% in 2018 versus just 4% in 2016. Individual states are taking different approaches on how to educate savers on the potential use of 529 savings for K-12 related expenses, notes Creonte. “Some states are neutral…And on the other end of the spectrum, some states are actively encouraging people to use the funds for K-12,” she adds.

Peg Creonte Offers Insight on Advisor Opportunity to Engage Employers Enrolled in State-Facilitated IRA Programs

In Lee Barney’s recent PLANADVISER feature, SVP Peg Creonte offers insight into how state-facilitated auto-IRA programs are helping business owners recognize the value of workplace retirement programs. As these business owners and their employees get more familiar with these programs as offered by the state, they become more informed retirement plan prospects for financial advisors. “We believe that over time, as an employer grows its plan and its employees get more comfortable with setting aside money, they could become a source for financial advisers to pursue selling qualified plans to these businesses,” adds Creonte.

Ascensus’ Annual Savings Trends Research Reveals How Individuals Are Saving for Their Financial Futures

Proprietary Data Offers Valuable Insights into How Americans Are Contributing to 401(k), 529, Health Savings, and ABLE Accounts

Dresher, PA — Ascensus—whose technology and expertise help millions of people save for retirement, education, and healthcare—has released new insights across its universe of retirement, education, Achieving a Better Life Experience (ABLE), and health savings accounts on the Inside America’s Savings Plans microsite. As the nation’s largest independent recordkeeping services provider and government savings facilitator, Ascensus offers a unique, comprehensive perspective into how Americans are saving for the future.

Ascensus analyzed data across a population of over 88,000 retirement plans, 4.6 million 529 college savings accounts, 280,000+ consumer-directed healthcare accounts, and 20 ABLE plans for which it provided recordkeeping and administrative services as of 2018 year-end. The firm also highlighted health savings account (HSA) industry data from Devenir, a national leader in providing customized investment solutions for HSAs and the consumer-directed healthcare market. The following themes provide insights into how savers are engaging with these tax-advantaged savings vehicles.

Plan sponsors and savers see the value in automatic savings models:

  • 401(k) plans designed with automatic enrollment and automatic escalation features saw an average plan-weighted participation rate of 81%, which was 10 percentage points higher than that in plans without automatic enrollment.
  • In 2018, 35% of 529 account owners had scheduled recurring bank contributions and 20% of ABLE accounts leveraged automatic savings methods. Approximately 6% of 529 account owners utilize payroll direct deposit, but there is certainly more opportunity for employers to offer and promote 529 account payroll integration to help employees seamlessly make regular contributions.
  • According to Devenir, 26% of all HSA contributions came directly from an employer and 56% came from an employee through their workplace in 2018. By pairing HSAs with high deductible health plans and enabling payroll direct deposit, employers can help employees build a foundation of health savings.

Digital tools have a positive influence:

  • Ascensus’ Retirement Outlook Tool allows savers to refine retirement savings goals, illustrating how their current savings levels could impact future readiness. In 2018, 26% of first-time tool users were saving at an average rate of 8% within a few weeks of engaging with it. This suggests that access to the right planning tools can make a positive difference in getting employees closer to a savings rate of 9% or more, the minimum rate that “financially prepared” savers have selected according to Ascensus’ partner Financial Finesse, the largest independent provider of unbiased workplace financial wellness programs in the country.1
  • The firm’s Ugift platform enables family and friends to simply and securely make gifting contributions to beneficiaries’ 529 accounts. The Ugift website allows users to establish gift-giver profiles and schedule recurring gifts to streamline the process—and gifting behaviors are on the rise as a result. As of 2018 year-end, gift givers had established 26,284 online profiles and 10,438 recurring gifts. Overall, the Ugift program saw a 345% year-over-year increase in dollars gifted to 529 accounts.

Changing financial and market landscapes are influencing individuals’ savings strategies:

  • Ascensus’ 401(k) platform data highlights that individuals under 25 years old are saving at lower savings rates than those in older age groups, which suggests the need for further investigation into the impact of competing financial priorities, including student loan debt. However, there is a notable, positive difference in progress for savers between 25 and 34 years old: Of all retirement savers on our platform who have found that they are “on track” to meet their goals, 20% of them are between 25 and 34 (versus just 3% for the under-25 age group). 
  • As tuition expenses continue to rise, families see the value of investing in 529 accounts to build a foundation of education savings. The market downturn in 2018 had a minor impact on overall 529 account balances across all demographics, but this average balance still reached nearly $23,000 as of 2018 year-end. Another key trend tied to this landscape of higher education expenses is the entrance of older generations of account owners into the 529 market. Account owners ages 55 to 64 and over 65, with average beneficiary ages of 17 and 13 respectively, had the second- and third-largest average balances of all age groups, both exceeding $22,000.
  • Healthcare expenses continue to increase exponentially, with the Employee Benefit Research Institute (EBRI) reporting that the average couple will now cumulatively need $399,000 for a 90% chance to cover their healthcare expenses in retirement. Heightened awareness for these staggering costs and the increasing popularity of high deductible health plans have driven HSA enrollment to new highs. There are currently over 25 million HSAs held by savers across the U.S. with a combined $53 billion in assets.

“We’ve seen a shift in the way that individuals across different life stages are saving for themselves and their families,” said David Musto, president of Ascensus. “To continue to address the savings deficit millions are facing, our industry needs to focus on offering tools and resources that make it quick, simple, and automatic for savers to track their progress.”

“Employers, state governments, and financial advisors will continue to play an integral role in encouraging individuals to make the most of the savings vehicles and tools available to them,” Musto concludes.

For additional trends and insights from Ascensus, visit


About Ascensus
Ascensus is the largest independent recordkeeping services provider, third-party administrator, and government savings facilitator in the United States. The firm delivers technology and expertise to help millions of people save for what matters most—retirement, education, and healthcare. For more information about Ascensus, visit View career opportunities at

12018 Year in Review: A Closer Look, Financial Finesse Think Tank Research, May 2019.

Prescription Drug Manufacturer Coupon Values May Be Excluded for Determining Annual Cost-Sharing Limits, for Now

The Department of Labor (DOL), Health and Human Services (HHS), and Internal Revenue Service (IRS) jointly released an FAQ on August 26, 2019, that explain whether health plans should be including drug manufacturers’ coupons in determining the annual cost-sharing limits under the Affordable Care Act (ACA). HHS regulations that announced the 2020 benefit and payment parameters (including the maximum annual cost-sharing limits) indicated that plans and insurers may exclude the value of drug manufacturers’ coupons when determining the annual cost-sharing limits when a medically appropriate generic equivalent is available. This applies for plan years beginning on or after January 1, 2020.

Feedback received following the release of these regulations was that this provision implies that such coupon amounts must be counted toward the annual cost-sharing limit in any other circumstance, and that a requirement like this could lead to a conflict with the certain rules for high deductible health plans (HDHP) and the establishment of health savings accounts (HSA). IRS guidance surrounding HSA’s provide that drug manufacturer coupons would not affect an individual’s HSA eligibility as long as the plan did not apply the value of the coupon towards their deductible.

Since plan sponsors and insurers may not be able to comply with both the impending HHS rules and the existing IRS regulations simultaneously, the agencies jointly intend to address this conflict in the HHS regulations that announce the 2021 benefit and payment parameters. Until then, enforcement action will not be initiated in cases where a health plan excludes the value of drug manufacturers’ coupons from the annual limitation on cost sharing, including in circumstances in which there is no medically appropriate generic equivalent available.