Deals & People February 7, 2018

Lori Lucas New President of EBRI

Lucas explains to PLANADVISER key initiatives for the Employee Benefit Research Institute's future.

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The Employee Benefit Research Institute (EBRI), a source of data and research on retirement, savings and health programs for workers, announced the appointment of Lori Lucas as president and CEO, effective immediately.

Lucas tells PLANADVISER there is a new vision for EBRI’s future as it marks its 40th anniversary in 2018. For one, EBRI is planning to roll out a new website.

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“The key to the new vision is making research more relatable,” she says. “My background has been doing various types of research in various roles—the Callan DC Index, different research at Hewitt—and we want to make complex concepts accessible to those not necessarily in the industry.” Part of EBRI’s role is to be a presence in Washington and make information available to those making policy decisions, she adds.

Another goal of the new vision for EBRI is to expand the notion of what employee benefits really are, according to Lucas. “Historically, EBRI’s focus has been on retirement plans and health care benefits, but now, many employees are coming out of college with student loans they want to pay off before saving for retirement, and many of all generations do not have emergency savings. So what does employee benefits mean now?” she queries.

EBRI wants to strengthen its voice and presence by doing more testimony at conferences, making more partnerships and improving its visibility so its voice is stronger, Lucas adds.

Lucas replaces Harry Conaway, who was president and CEO for two years, following the retirement of Dallas Salisbury, the founding president and CEO.

Most recently, Lucas worked as an executive vice president at Callan Associates, where she was responsible for setting the direction and profitability of Callan’s defined contribution (DC) business, managing the Defined Contribution Consulting Team, launching and delivering retirement research, and directly working with plan sponsors and other clients. Prior to that she was director of Retirement Research at Hewitt Associates.

Even at her short time at EBRI, Lucas says there are a number of issue briefs already underway. One is the examination of automatic enrollment’s impact on participant debt. “We are using our participant database to find out what impact we see. Are people going to be burdened by debt what does empirical evidence show about auto enrollment’s effect on debt levels?”

With the recent market volatility, Lucas says EBRI will be looking closely at the section on its website that shows changes in participant account balance on a monthly basis. “It’s been positive for a while. We’ll be looking at it more closely to get empirical data about what’s happening with balances and why,” she says.

One can tell by her experience and her enthusiasm about the new position that research is Lucas’ thing. “This is my dream job!” she exclaims.
Compliance February 6, 2018

Small-Business Clients Will See Biggest Tax Impact on Retirement Plans

The net result of the Tax Cuts and Jobs Act is that many clients will have a lower effective tax rate, and this can have a direct impact on small pass-through business owners’ decisions about running retirement plans.

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During a highly detailed webcast session hosted by Kravitz Inc., now an Ascensus company, the firm’s president, Dan Kravitz, discussed the potentially significant impact the Tax Cuts and Jobs Act may have on financial advisers and employer-sponsored retirement plans.

Like other experts to address the topic, Kravitz stressed that financial advisers cannot act in the capacity of a certified public accountant (CPA) or any other “tax adviser” who could legally represent a client in front of the Internal Revenue Service (IRS). While clients will undoubtedly come to their financial advisers looking for tax advice during 2018, this is simply not territory in which brokers or registered investment advisers can offer specific advice or recommendations.

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Given this, it would naturally make sense for advisers to work to create new partnerships this year with service providers who can offer up real tax advice. As Kravitz noted, clients can be surprisingly appreciative as a result of successful referrals, leading to increased loyalty and a greater depth to the advisory relationship.  

Kravitz also stressed that IRS guidance is still needed to address many unanswered questions left open by the plain text of the Tax Cuts and Jobs Act as passed by Congress and signed by President Trump—so once that guidance comes out, what has been broadly discussed so far could change.

While they cannot advise on the issue directly, Kravitz still urged advisers to familiarize themselves with the changes that have been made to the treatment of pass-through entities, highlighting that most small business owners organize their companies as a pass-through entity. Plan advisers will have an important role to play as business owners come to terms with how they will structure their various sources of income in 2018, and how these income sources may interact with both qualified and non-qualified retirement plans.

“Many but not all of these owners can now deduct up to 20% of qualified business income,” Kravitz noted. “There are many limitations and phase-outs that have to be considered, but pass-through entities are taxed at the individual level, as we know, so it is important to understand the new individual rates, because it will all directly impact plan design decision that do fall within our purview.”

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