What Advisors Actually Consider Safe 2.0 Act: Survey


Optimistic Anticipated Influence on Monetary Advisor Practices

Not solely do monetary advisors anticipate Safe 2.0 to lead to higher retirement outcomes for purchasers, additionally they anticipate the laws to have a reasonable to giant constructive influence on their practices over the subsequent 12 months, as demonstrated beneath.

Secure 2.0 Chart - PGIM Data via David Blanchett

Monetary advisors surveyed have been overwhelmingly constructive in regards to the potential influence, with 62% being reasonably or largely constructive, whereas solely 5% the place reasonably or largely unfavorable.  Monetary advisors clearly understand the Safe 2.0 Act as a approach to interact with purchasers and assist them create higher outcomes and reveal the worth of economic planning

Blended Perspective on the Development of Annuities in 401(okay) Plans

There are a selection of provisions within the Safe 2.0 Act focused towards 401(okay) plans. Whereas the unique Safe Act was extra centered on annuities, e.g., introducing the fiduciary protected harbor, there are updates within the 2.0 model, comparable to growing the cap for certified longevity annuity contracts (QLACs) in addition to combining payouts from an annuity and the 401(okay) plan for the aim of calculating RMDs.

Monetary advisors have a combined perspective on the extent Safe 2.0 will drive greater availability and utilization of annuities in U.S. retirement plans within the close to future. The exhibit beneath comprises responses to a query asking whether or not advisors agree that Safe 2.0 will drive 20% of U.S. retirement plan belongings into annuities within the subsequent 12 months.

Secure 2.0 Chart - PGIM Data via David Blanchett

We are able to see that the distribution could be very combined, with roughly the identical variety of responses agreeing and disagreeing with the attitude of development round annuities.

Maybe what’s most attention-grabbing about these responses is that there isn’t any relationship between the perceived influence on annuity utilization in DC plans and whether or not the monetary advisor makes use of annuities. In different phrases, it’s not just like the responses agreeing and disagreeing with the expectations are being biased by whether or not the monetary advisor makes use of annuities; the responses are everywhere in the map.


Monetary advisors have considerably combined views on the Safe 2.0 Act however usually see alternative for purchasers in addition to themselves. Subsequently, familiarizing your self with provisions of the Safe 2.0 Act is probably going a sensible transfer!

David Blanchett is managing director and head of retirement analysis for PGIM DC options.


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