SPARK HIGHLIGHTS & GOALS
SPARK Institute 2021 Review: Achievement Amidst Uncertainty
Against a backdrop of ongoing pandemic and political uncertainty, the SPARK Institute and our members were able to accomplish many important objectives in 2021. Many of our past year’s successes came about through the commitment and expertise of SPARK committee members, who offer their time and talents to help improve the financial security of America’s retirement savers.
Q1 2021 Highlights
Beginning in late 2020 with the passage of the SECURE Act — which addressed many of our organization’s previous goals — we started a project to update our legislative and regulatory objectives.
Members submitted suggestions and voted on SPARK’s ongoing priorities, which are:
- Defend the Industry’s Core Values
- Promote Financial Wellness
- Encourage Simplifications and Administrative Efficiency
- Protect the Gains We Made in eDeliver
- Foster Lifetime Income Solution
As 2021 began, a new presidential administration meant new legislative priorities. Our Government Relations Committee concentrated on what might come out of Budget Reconciliation and the Department of Labor (DoL) focus on missing participants.
SPARK’s Public Relations Committee kicked off the year with a new program of short videos featuring our member firms, highlighting our priorities. The first video topic we chose was financial wellness.
Industry Best Practices for Cybersecurity
In February, a sub-committee of SPARK’s Data Security Oversight Board developed seven industry best practices to help prevent fraud. These practices emphasize that fraud prevention is a shared responsibility of recordkeepers, plan sponsors, and participants. Plan sponsors gave very positive feedback on these best practices. This fraud prevention work proved very timely, since we announced our best practices just before the DoL released its long-awaited Tips for Cybersecurity.
Q2 2021 Highlights
Work with Social Security Administration
In April, SPARK began working with the Social Security Administration to help promote My Social Security Portal. This original effort later grew into discussions on how SPARK member firms might be able to integrate Social Security Data directly with their participants’ data. A project is underway to explore direct APIs between recordkeepers and the Social Security Administration, which will continue into 2022.
For the second year in a row, SPARK partnered with DCIIA to host a remote Public Policy Series held over three consecutive days in June. The highly successful program covered a variety of timely topics including: Who’s the Fiduciary?, How in the World Should We Address Retirement Income?, The Workplace of the Future, and more. We also continued our expansion into global defined contribution systems and invited experts from the Canadian Retirement System to participate. Overall, attendees gave the Public Policy Series a 93% excellence rating.
Partnership Studies Blockchain Technology
Throughout the summer, we invited SPARK members to engage with a team from The Institutes — which provides educational support, resources and leading research to help those in risk management and insurance better serve the public — on the work they are doing to apply blockchain technology to the insurance industry. Blockchain technology has the potential to lower costs and reduce risks throughout the retirement system. As part of the Institutes RiskStream Collaborative™, the group examined two applications and how they work within the retirement industry: mortality monitoring and agent licensing. Work on these topics will continue in 2022.
Department of Labor Developments
Also, during the summer, the DoL asked SPARK to comment on its cybersecurity work. SPARK has worked closely with the DoL for several years on cybersecurity, and as noted, we were happy to see that much of what the DoL recommended is consistent with our industry best practices. The Wall Street Journal, PLANSPONSOR, 401KWire, and the Georgetown University Retirement Center all published favorable articles on our best practices. SPARK was also asked to present on cybersecurity at the Defined Contribution West Conference and Bechtel’s Subcontractors Forum.
In August, SPARK presented our survey findings on self-directed brokerage accounts to the DoL’s ERISA Advisory Council. Policy makers were concerned that self-directed brokerage accounts might be used by plan sponsors to avoid their fiduciary responsibilities. Our findings showed very few plan participants utilize a self-directed brokerage option and plan sponsors usually offer them as a way to satisfy small groups of participants who want to invest in a specific fund or asset class.
Focus on Retirement Advisors
In late August we kicked off a pilot program to better understand what advisors want and what they are getting from recordkeepers. Together with DCIIA, we surveyed advisors, asking them to respond to about 20 questions, which resulted in over 90 data points. More than 60 advisors completed the survey.
We presented the results at the annual SPARK Forum in November, with a panel of senior executives from the advisor community leading a lively discussion of the results.
Q4 2021 Highlights
SPARK Forum in Palm Beach, FL
At the SPARK Forum we presented two important insights from our advisor survey:
- Advisors ranked cybersecurity and fraud prevention as their most important concerns when evaluating retirement service providers. This is no doubt related to the release of the DoL’s cybersecurity best practices in March.
- Financial wellness and its components, such as emergency savings and student loan repayments, are not a critical focus for retirement advisors. This runs counter to much of the work of SPARK’s members and our goals. However, several advisors in the audience shared insights that provided important context for these results: It’s not that financial wellness is unimportant, but it’s too difficult for advisors to obtain the necessary data to help participants. In response, SPARK members committed to convening discussions on how to simplify the transfer of data.
Other critical topics facing our industry discussed among the more than 300 Forum participants centered around our focus theme of mergers among recordkeepers, advisor firms, and investment managers. We also discussed what the industry would eventually look like based on these mergers and acquisitions.
As we begin 2022, our members and SPARK committees are actively engaged in several large projects.
Social Security Portal
As mentioned, one of these projects is the work we are doing with the Social Security Administration, led by our Data Security Oversight Board and Senior Operations Council. Our hope is to make it possible for our members to integrate their participant portals directly with Social Security to provide participants with actual Social Security information, rather than estimates. If this proves to be successful, we plan on a second project that would allow member firms the ability to initiate Social Security transactions on behalf of their participants. This could simplify and enhance retirement planning for American workers by providing them with a one-stop shopping experience.
A second effort we have underway is to directly align SPARK’s Cybersecurity Best Practices with the DoL’s Tips for Cybersecurity. The team working on this project — led by our Data Security Oversight Board — has started to develop a document that uses the DoL’s guidelines and provides plan sponsors with a step-by-step approach to managing their cybersecurity responsibilities using SPARK’s industry best practices.
Innovating with Digital Technology
SPARK has started to explore digital identity technology as a possibility for the easier transmission of data among service providers. This might offer a solution to address the concerns raised by retirement advisors about the difficulties they face in gathering the necessary information to help participants implement financial wellness programs.
Members Drive SPARK’s Success
None of us can be certain of what event will unfold in 2022. But we’re certain that with your help, the SPARK Institute will be able to accomplish even more!
Thank you for your continued commitment to the success of the SPARK Institute. Together, we will help improve retirement outcomes for millions of Americans in the years ahead.
COMMITTEES ARE AT THE HEART OF SPARK!
In 2022, we encourage you to involve others within your firm to take advantage of the committees SPARK offers. SPARK committees drive our key initiatives and are also a great way to stay at the forefront of the latest industry trends and developments.
Currently, we have six committees open to all advisory board firms, with a seventh committee scheduled to launch in 2022:
- Government Relations Committee
- Data Security Oversight Board
- Public Relations Committee
- Senior Operating Council
- Privacy Committee
- Event Committee
- Committee responsible for working with retirement advisors (coming in 2022)
If you or someone from your firm would like to join one or more of these committees, please contact Marlene Jung at firstname.lastname@example.org.