A Letter from L&H: 2024 Year-End Reflections and 2025 Outlook

Nate Moody, CPFA – RETIREMENT ADVISOR, PARTNER

December 2024

2024 has been a year of competing priorities for our clients. Businesses have faced lingering challenges from record wage increases following the post-pandemic inflation wave, ongoing labor shortages, and growing regulatory demands. These challenges have been intensified by a fragmented and complex state legal framework.

This year, our focus has been on supporting clients in three key areas: managing the implementation of SECURE Act 2.0 and the Maine Retirement Plan Mandate, identifying opportunities to create administrative efficiencies, and exploring innovative approaches to enhance their benefits packages.

Regulatory Updates

Maine businesses began the year navigating the new mandate requiring employers with five or more employees to establish a qualifying retirement plan or enroll in a state-run IRA program overseen by the Maine Retirement Savings Board (MRSB). Demonstrating our commitment to leadership within the industry, Nate Moody, one of our Partners, was honored to be nominated by Governor Mills to serve on the MRSB.

This mandate arrived as many advisors began retreating from the small-plan market due to high service costs and limited revenue potential. At L&H, we recognize the critical role access to retirement plans plays in improving retirement outcomes. That’s why we doubled down on our commitment to small businesses by forming our Small Business Team, led by Owen Ramsay and Grace Bennett and supported by Analyst Connor Leonard. This team successfully helped 17 Maine businesses establish their first retirement plan.

For our existing clients, attention shifted to the federal level with the continued rollout of SECURE Act 2.0. Key areas of interest included expanded withdrawal provisions, self-certification of hardships, increased catch-ups for ages 60–63, increased force-out thresholds, and student loan matching. Most significantly, SECURE Act 2.0 reinforced the importance of fully integrated payroll and benefits systems.

Administrative Efficiencies

Increasing regulatory complexity has driven plan sponsors to seek administrative efficiencies. Recordkeepers and payroll providers are differentiating themselves with advanced technology and automation capabilities.

Payroll providers have made strides in offering 360-degree payroll integration. Local providers have partnered with larger firms or third-party intermediaries to enhance their offerings. Recordkeepers, leveraging expanded data access, now automate tasks such as employee eligibility tracking, notice delivery, and automated force-outs.

Plan sponsors have also used regulatory changes as opportunities to streamline plan design. For instance, many have removed hours-based eligibility requirements in response to SECURE 2.0’s long-term part-time employee provision. Others have aligned eligibility for employer contributions with employee deferral timelines or shortened wait periods to match other benefits.

Innovative Benefit Design

Persistent inflation has strained employees’ financial well-being, leading to increased hardship withdrawals and loan requests. Research increasingly underscores the link between financial health and overall wellness. Employees are looking to employers for support, whether through specific benefits or financial education programs. SECURE Act 2.0 offers plan sponsors new ways to address employees’ financial priorities beyond retirement savings.

Many companies are focusing on emergency savings and addressing major expenses like student loans. Some clients are adopting the student loan matching provision as soon as it becomes available through their recordkeepers. Others are implementing Section 127 Education Assistance Programs, which offer greater flexibility in addressing student debt.

Plan sponsors are also modernizing how they communicate benefits, particularly as younger generations join the workforce. L&H is excited to launch a new digital 401(k) education platform in partnership with Venrollment. This platform will provide employees with customized presentations, short videos, contact information, and the ability to schedule time with an L&H Retirement Counselor at the click of a button. Look for more details on your plan’s page in the New Year.

Looking Ahead

In 2025, we anticipate continued focus on SECURE Act 2.0 implementation and a renewed emphasis on SECURE Act 1.0’s lifetime income provisions, designed to help retirees manage their savings distributions. Employers will increasingly adopt payroll integration as a necessity rather than a convenience. This trend will not only streamline administrative processes but also enhance overall plan efficiency and compliance.

Financial health will continue to take center stage. We expect a growing number of employers to transition from providing standalone financial education to integrating comprehensive financial planning as a workplace benefit. This shift will better equip employees to navigate their personal financial challenges and plan for the future. Employers will also expand efforts to address holistic financial well-being, such as supporting emergency savings initiatives, healthcare expenses, and student loan repayment programs.

At Lebel & Harriman, we’re excited to lead these conversations and provide innovative solutions. Our commitment to modernizing retirement plans and leveraging cutting-edge technology ensures we remain a trusted partner for our clients. In 2025, we will continue to refine our services, introduce new tools like the Venrollment platform, and explore additional opportunities to enhance the employee experience.

Our mission remains clear: to help businesses build resilient retirement plans, support their workforce’s financial health, and navigate the evolving regulatory landscape with confidence. Together, we look forward to another year of collaboration, innovation, and success.

Securities Disclosure: Securities offered through Valmark Securities, Inc. Member FINRA, SIPC. Investment Advisory Services offered through Valmark Advisers, Inc. a SEC Registered Investment Advisor. | 130 Springside Drive, Suite 300, Akron, OH 44333-2431 | Telephone: (800) 765-5201 | Lebel & Harriman, LLP and Lebel & Harriman Retirement Advisors are separate entities from Valmark Securities, Inc. and Valmark Advisers, Inc.