Partner Corner: A leadership conversation looking to the future

A conversation with Jennifer Doss, senior director and defined contribution practice leader at CAPTRUST, and Brendan McCarthy, Head of Retirement Investing, Nuveen

This industry is driven by people who want to help people. That is fundamentally why we are all here — to help American workers have a safer and more secure retirement. But priorities naturally have to shift, and regulation and technology are constantly moving targets. To see what those shifting priorities entail I sat down with my good friend Jennifer Doss. She has been with CAPTRUST since 2007, and has been a fantastic industry advocate, vocal speaker and podcast host for many years now.

McCarthy: Just to kick off, thinking back to how you got into this industry and your initial time with CAPTRUST, how did you get into the retirement advisory business and what changes have you seen over the years?

Doss: I didn’t set out to work with defined contribution plans. I started my career as a financial advisor with a broker dealer, but I found out quickly that sales wasn’t for me. I also didn’t get the feeling that I was really helping people, and that’s what I was ultimately looking for. So, in 2007 I took a job at CAPTRUST, here in Raleigh, North Carolina, knowing almost nothing about the retirement industry.

Over time, I grew to love the work because it impacts millions of everyday people preparing for retirement. I always thought it was crazy how the relationship between an advisor and a plan sponsor can impact so many lives. A lot of the change we’ve seen stems from the Pension Protection Act in 2006, which recognized that while we had shifted to a self-funded defined contribution (DC) system, plan participants still needed a push from their employers. That led to the proliferation of auto-enrollment, auto-escalation, and investment defaults.

I think about CAPTRUST’s reinvestment back into our organization every year, even during hard times. Markets ebb and flow, but really keeping your eye on the ball and reinvesting when other people are not has been critical to our success.

I also think the culture of employee ownership that we have built is a major factor. The last thing I would say, is our ability to have private equity partners involved in our business. The private equity partnership coupled with our commitment to staying employee majority-owned is really important to who we are. Everyone’s rowing in the same direction.

We’ve also always had a very entrepreneurial spirit as a company. Fielding Miller, our founder and CEO, set that tone early on, and most of us who have been here a long time still have that drive. We’re not resting on our laurels.

McCarthy: Obviously, we’ve seen a lot of shifts in the industry over the last couple of years with lifetime income solutions coming to market and the impact of SECURE 2.0 changing client relationships. Can you share with us a little bit about your top priorities right now?

Doss: Two big priorities stand out from the retirement side of our business: financial wellness and the discretionary relationship with plan sponsors.

Our financial wellness program is crucial to the work that we do to help each individual retire. I talked earlier about the impact that an advisor to a plan sponsor can have on all the participants. If you start to pair that with one-on-one advice at the participant level, building that connection, then you really have something very special. No matter where participants are in their retirement journey — or even if they just need help navigating their other employer benefits — we can help them.

On the discretionary side, we’re seeing over half of our new DC clients opting to engage us in a 3(38) discretionary relationship. And that’s meaningful. We see good adoption at all plan sizes. Smaller plans generally need help with some of the workload responsibilities and subject matter expertise, while the larger plans want a lot of fiduciary protection. What we have is a service that appeals broadly across the market because we help plan sponsors manage both administrative burdens and strategic decisions.

We’re thinking about both of these aspects in tandem, because we can have a big impact with either. If we work with a plan sponsor to make a change in an investment plan, we can help sponsors with optional provisions and plan design, and that has an effect on the individual. But we can have no greater effect than an individual relationship with that participant, really helping them with their individual finances. Both are very, very important.

It’s still early to assess the full impact of SECURE 2.0, and a lot depends on employee demographics. But we’ve seen broad interest in provisions like additional withdrawals for natural disasters, terminal illness, and domestic abuse, as well as the increased mandatory distribution limit from $5,000 to $7,000. Many plan sponsors have adopted these changes.

Later this year, we expect plan sponsors to evaluate whether these optional provisions are achieving their intended goals. Plan sponsors introduced these features to encourage participation and provide flexibility, but if they don’t see employees paying back withdrawals, they may reassess.

Personally, I think the most impactful provisions for the industry are the auto-enrollment and auto-escalation mandates for new plans, and also expanded participation for long-term part-time employees. While these changes don’t affect existing plans as much, they are critical steps toward increasing access and participation in retirement plans. That’s one of the industry’s biggest challenges.

McCarthy: I just want to follow up on the changes to emergency access to funds, but also getting more employees into plans and thinking about their long-term investments in different products. To what extent is there a conflict between making it easier for employees to access funds in emergencies and ensuring they save for retirement?

Doss: It depends on the philosophy of the plan sponsor. Some are trying to get people to save more and avoid early withdrawals. And then you have another group that wants people to feel comfortable participating by promoting flexibility around withdrawals. In some cases, the lack of access is what’s holding employees back from participating.

Both approaches have merit. I don’t know if there’s a right or a wrong answer. It comes down to knowing the participant base and what the plan sponsor is trying to achieve.

McCarthy: We’ve both spoken on this a lot over the years but heading into 2025, I’d be curious to see how you see the integration of guaranteed lifetime income solutions developing?

Doss: I really like the way the industry is headed with these products. It’s a topic that we’ve been talking about for over 15 years, but the interest has been kind of spotty, and the quality of available products is a little lower than I’d like. What we’re seeing now is a huge investment in bringing products to market by insurers and asset managers, better partnerships, and improved technology that allows for more innovative design. It’s a really exciting time for guaranteed lifetime income. Clients are also now asking for it, and that’s critical as well.

We think it’s a really important conversation to have, and one that we believe is part of a larger retirement income discussion with a plan sponsor. I think everyone should have access to guaranteed lifetime income in some way. The key is providing optionality to annuitize, and not a mandate. If you can provide that optionality to participants in the decumulation phase but not create an opportunity cost for them in terms of performance in the accumulation phase, then that’s the ideal solution. That’s what we’re seeing in the market today.

I anticipate adoption will start at the larger end of the market, where there’s greater familiarity with these products, before gradually moving into mid-sized and smaller plans.

McCarthy: gaze into your crystal ball and think about what you’d love to change in the industry if you could. If you had a magic wand, what’s the one change you would like to see in our industry? And, aside from what we’ve already discussed, what else is in your forecast beyond 2025?

Doss: I would love universal access to reasonably priced financial wellness and advice services. Traditionally, high-quality financial advice has been limited to those with the financial resources to get it. New technology is starting to change that.

In terms of other 2025 forecasts, I alluded to it a little earlier, but I think we have to solve for the coverage gap in the U.S. This will require federal legislation to support small businesses and gig workers. Some states have taken steps with IRA mandates, but we need broader leadership from Congress.

For 403(b) plans, one of the most pressing issues is access to collective investment trusts (CITs). These vehicles are ideal for tax-qualified plans, but many 403(b) plans still don’t have access. That needs to change. It could put more money back into participants’ pockets.

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