Episode 30: A Mid-Year Check-In for Retirement Plan Sponsors

Please note: This is a transcription so there may be slight grammatical errors.

Hello, and welcome to Revamping Retirement. A podcast brought to you by CAPTRUST, where we
explore the opportunities and challenges facing today’s retirement plan sponsors and fiduciaries. Our
hosts, Jennifer Doss and Scott Matheson lead the employer sponsored retirement plan practice at
CAPTRUST. One of the largest registered investment advisors in the US and a thought leader in the
retirement plan advisory and consulting space. We hope you enjoy Revamping Retirement.

Scott Matheson:
Welcome back to episode 30 of Revamping Retirement. I’m Scott Matheson and I’m joined as always by
my far more talented co-host Jennifer Doss. Jennifer, are you excited for another episode?

Jennifer Doss:
I really am.

Scott Matheson:
Nice, me too. On today’s episode, our good buddy, Mike Webb will be joining us for his usual Minute
with Mike, where he’ll be talking about one of his own personal favorite topics, required minimum
distributions. That should be good. For our last segment, seeing as we’re past the midpoint of 2021,
we’re going to bring in our chief investment officer Mike Vogelzang. He’s going to chat a little bit more
about, he and our investment committees latest views on the economy and the markets as we start into
the second half of the year I just noticed, apparently you have to be named Mike to be on the show with
us today. So that’s good.

But first, since we are in fact past the midpoint of the year, I do want to take a few minutes to check-in
with you Jennifer, on where we are at this point in the year. So I want you to put on your DC practice
leader hat. Think back to last December, because you may have forgotten this, but you actually
authored our annual predictions piece for the upcoming year. Guess what? Now, it’s time to see how
you’re doing with less than half the year to go. No pressure of course, but you better be batting better
than 500 here. Just kidding. Come on. Nothing? All right. I mean, seriously. You laugh, it’s forced laugh.
Come on.

Jennifer Doss:
Well, my name’s not Mike. I wasn’t sure if I was allowed to actually be on the show.

Scott Matheson:
Oh, you’re right. My bad. I can call you Mike. I just think that’s weird. All right, we’re going to start. You
ready? We’re going to start with a fan favorite. One of the things you actually wrote about was ESG,
environmental social governance related investing, which has gotten more and more popular just in the
broad world of investing, of course. But more specifically, you wrote a little bit about what we might
expect this year out of the new administration, the Biden administration, as they were trying to either
claw back or fix or better yet, for everybody out there to come up with some definitive guidance.
Particularly, if you’re a ERISA planned sponsor. And you wanted to include these types of investments in
your menus. So I’m curious, where are we anything to report there? What do we hearing out of planned
sponsors in terms of growing demand? Love to hear where your head is there.

Jennifer Doss:
Yeah, I think we’ll take a victory lap on this one, on the predictions. I do think that we were pretty spot
on. Now, we did not anticipate that there would be a non-enforcement policy. That, that’s how they
would kind of shut things down, but we are actually in still more of a gray area with ESG. I think for a
ERISA cover plans really, then ever before, which is unfortunate because it’s very topical. And top of
mind for planned sponsors. We’ve already had this very back and forth tug of war between
administrations in the past, in terms of what’s allowable, what’s frowned upon how things are worded.
Just tweaking little phrases and the guidance can make a difference in how you interpret it. And so, in
some cases we’ve had administrations that are very pro ESG and then we’ve had some that are very,
frowned upon ESG.

There’s two rules right now that are actually live, financial factors in selecting plan investments. And
then there’s a fiduciary duties regarding proxy voting and shareholder rights. So when people talk about
ESG role, that’s really the rules that they’re talking about. And you’ll notice that ESG is not really
included in the name of those, but it’s very much pertinent to the role. Now, the Department of Labor
has announced that it intends to revisit both of these rules later, but right now, they have a nonenforcement policy for those two. So they are live in the federal register, but they are not going to
basically, pursue any kind of enforcement action against the fiduciary for basically, failing to comply with
these rules.

The really tricky part, again as I’ve mentioned, a couple of times, is they are still final rules, they’re in
place. And even though this non-enforcement policy from the DOL doesn’t mean that they’re going to
bring any action against the planned sponsor, it doesn’t preclude any kind of legal claims to be brought
against the planned sponsor for acting contrary to the current rules. So essentially, we have this weird
non-enforcement policy for two rules. We have a statement from the Department of Labor that they do
plan to revisit the rules. And we assume that they’re going to make them more ESG friendly later this
year, but we still have final rules that are not very ESG friendly on the books.

So we’re in this weird spot. So what we’ve been hearing from planned sponsors is really just a lot of wait
and see, but they are interested in learning what’s out there and what others are doing, again it’s very
topical. So we’ve been really taking, I would say this time, and I think the planned sponsors have been
taking this opportunity to do a lot of educating around ESG in terms of what it is, how you might
incorporate it into your plan, how many options you might want to offer for, how do you offer it?

So one of the biggest questions that we have right now is, what kind of ESG fund do you want to offer? I
think we’re very much past that point of planned sponsors saying, “I just want to offer an ESG fund.”
And not giving any more direction than that. And it’s really more of a check the box exercise. I think
they’re looking more for specific options to meet the needs of their participant base. And that may be
just ESG integrated funds. It may be a suite of ESG options and different asset classes, or it could even be
ESG funds that are kind of aimed at a specific goal, like alternative energy or clean water. I mean, net,
net. I guess there are more options than ever before with ESG and taking this opportunity to learn, but
we are still very much in a wait and see mode from planned sponsors.

Scott Matheson:
Yeah, it’s a really good point because there’s not a single flavor of ESG. You can’t just pick a fun and
expect that your participants are going to get on board with those particular values or limitations, for
sure. That’s a pain point and obviously an evolving one in terms of the evolution of the world of
investment options. But I love that the answer was non-enforcement policy. That’s always a comforting
place to be when you’re a planned sponsor. I actually have been trying to get our CEO to put in a non-
enforcement policy on our dress code. So I could skip wearing socks in the summer, but that’s not gone
my way, still hope. Probably, not actually.

All right. So I’m going to give you credit for that one. So you’re one for one, as we start this conversation
out. Good work, keep it up here. All right. Okay. One of the other things you talked about, and you were
talking about this in a meeting you and I are in two weeks ago was, there’s a lot of bipartisan support in
DC and on Capitol Hill more specifically for SECURE 2.0 is it’s been called as we kind of turn the calendar
year in 2021. There was still bipartisan support, but it does seem like the package may be getting some
more steam here on the Hill. So what’s the latest there. And what do you think is going to happen back
half of 2021 with regard to that new piece of potential legislation?

Jennifer Doss:
Yep. It is definitely gaining some steam. We did think it would get attention this year and it definitely
has. When people talk about SECURE Act 2.0, just for clarification, kind of like when they talk about the
ESG rule and that’s not the actual name of the ESG rule. When people talk about SECURE Act 2.0, it’s
really securing a strong retirement act of 2021 is really what most folks are referring to. And that was
cleared by the House Ways and Means Committee in May. And so really, it’s at the point where it’s
waiting to be brought in front of the full House for a vote at this point. And the Senate has a very kind of
similar bill or bills, I guess, with similar provisions, they have improving access to the Retirement Savings
Act of 2021, for instance.

So it is likely that we get some sort of, if you just want to generically call it SECURE Act 2.0 legislation,
maybe by the end of this year, maybe early next. It’s really tough to say. I mean, we’ve got a lot of
budget items going on, so it’s hard to say what you get through and what you don’t. But a couple of the
impactful items that I think we could really see. I mean, there are 45 just in that House version that I
mentioned, so it’s a lot packed in there and again, a lot of it is bipartisan. So I do think there’s pretty
good likelihood that some of them will go through. But a couple of the impactful items, in my opinion,
anyway. Are just the assistance that it will give new plans. So small businesses that want to create new
plans. They are actually for new plans, it would mandate auto-enrollment and auto-escalation for new
plans that would be established. And then it would also provide a pretty significant credit for small
businesses that want to start a retirement plan.

I think this is important because the goal, if you hear Congress talk about it, is really to increase
retirement coverage across America. We have this issue of a lot of people that just don’t have coverage.
And so really, a lot of the things they’re trying to do is really, expanding that coverage. The other thing
that’s pretty significant is, opening up collective investment trusts, which are a type of investment
vehicle 403B plans specifically. Currently those plans are actually just limited to mutual funds and
annuities and their ability to invest in collective investment trust just like a 401k plan would be able to,
to get lower costs is a really a long overdue piece of legislation, in my point of view.

And lastly, there is a pretty cool student loan matching provision in there, that would allow for
employers to treat student loan repayments by the employees as elective deferrals for purposes of
matching contributions by an employer. So essentially, sometimes the employee has to decide, do I
want to repay my student loans? Do I want to defer into the 401k? And this would really help bring
those two things together and allow employers to be able to match those contributions for the
repayment of those student loans So a couple of exciting things in there, in my opinion. And again, I
don’t know if it’s under this year or early next, but we are likely to see some movement.

Scott Matheson:
Nice. What are the other 42? I’m just kidding. We’re not going into that.

Jennifer Doss:
How much time do we have?

Scott Matheson:
Yeah. So I do think the coverage one’s good because the one thing that’s been this thread for a long time
in data supports is the people are way more prone to save for retirement when their employer offers a
payroll deduction option. Primarily through a plan, though, even some of these state and auto IRA
solutions have proven early success in that regard. So that’s a big deal. And obviously, how do you get
partisan about that? So that’s good news. I will continue to call it SECURE 2.0, because whatever that
thing was, you said that Senate had, I think it came out as [inaudible] or something like that. It doesn’t
work. So we’re going SECURE 2.0.

Jennifer Doss:
Fair enough.

Scott Matheson:
Okay. So you’re taking credit on one that one?

Jennifer Doss:
I think so.

Scott Matheson:
Okay. Well, well done. Last one I want to pick on here was the technology-related predictions you made.
I think your subtitle, I went back and looked was, technology a double-edged sword for that subsection
and no doubt we’ve definitely seen some of the impact of one side of that sword this year. I guess the
bad side, are there good and bad sides to swords? I don’t know.

Jennifer Doss:
There’s a sharp side and a dull side, yeah.

Scott Matheson:
Okay. I guess it depends on the sword. I don’t know. That’s a good question. We’ll talk about that on our
next episode of the podcast.

Jennifer Doss:
Okay.

Scott Matheson:
The range, there was from kind of two large record-keepers announcing some pretty meaningful shifts
to their platform, technology platform, as they all scramble really to get these antiquated and expensive
to maintain systems into the cloud and into a cloud-based environment. So they can really focus
differentiated areas, user experience, things of that nature. And then of course, cyber security continues
to be a hot topic of both industry coverage and of uncertainty and concern among planned sponsors. As
we know, we talked about last time on our podcast and you did a webinar on. The good news is, DOL
gave some sponsors some guidance that’s been really valuable there. A good development, I think more
will come for sure because that’s probably one of the fastest changing things that’s going on in the
whole world.

All right. But I want to talk about the other side, the fun side of the sword. We’re going to call it the fun
side. Where are we on the upside of tech, as an enabler for customization and enhanced user
experiences and outcomes that you talked about?

Jennifer Doss:
Yep. Yeah. On the fun side of the sword, as you call it.

Scott Matheson:
That’s a thing now, that’s a thing. Yeah. It’s going to be in the dictionary. We’ll see.

Jennifer Doss:
I was going to call it the bright side, but sure. With access to more technology, more personalized
information from the record keepers, from the planned sponsors than what we’ve seen in the past. I
think, what we’re seeing is more customized advice programs than ever before. I think it’s just a natural
evolution, as the technology and that data improve for planned sponsors to kind of stop and ask like,
“What else is out there? Hey, we’ve been doing this for awhile. What else do you have?” I think
everyone wants more customized advice. I don’t think that, that’s again, that’s not a bipartisan thing. I
mean, everybody of course, wants more customized advice. It’s just a matter of how much it costs.

And I think with things like, managed account programs, for example. We as an industry are really able
to significantly improve that level and also the price for that customized advice. So I do think we are
seeing a lot of good innovations there. The technology improvement, I do also think impacts retirement
income innovations. It brings, I think a lot more options to the table in terms of how you can incorporate
things like drawdown advice or guaranteed income into your plan. And in the past, I would say that this
type of retirement income product has really been limited to again, what the technology integration
kind of support and really to tie those two ideas together here.

I think soon you will be able to provide customized, guaranteed income advice to participants through
an end plan, advice program. Again, such as a managed account. No more one size fits all, if you will,
because ultimately that is really a one size fits none solution because averages are not real people,
unfortunately. And so I think again, the more that we can provide these customized programs to folks,
the better. And so there’s a lot of innovation going on right now. I think it’s all good stuff.

Scott Matheson:
Yeah. So early innings, but making progress. So it sounds like you’re taking credit for that one too.

Jennifer Doss:
Yeah. I hate to do it, but yes.

Scott Matheson:
Okay. That’s better than 500, if my math is right for those three. All right, we’re going to stop it there.
That’s a good mid-year check-in I think on the big things that are going on for retirement planned
sponsors and so I’m holding you accountable. So why don’t you do the honors and hand it over to our
colleague there?

Jennifer Doss:
Yeah, absolutely. So as you mentioned, we’ve got Mike Webb. His Minute with Mike. He’s going to talk
about required minimum distributions or RMDs as they’re lovingly referred to within our industry. So
take it away, Mike.

Mike Webb:
Thanks, Jennifer and Scott. Mike Webb here with another Minute with Mike. This month’s minute
features a topic that has been quite a challenge for many retirement plan sponsors and participants over
the years, namely required minimum distributions or RMDs for short. So what is an RMD? Well, an RMD
is an annual retirement account distribution that is required to begin once a retired participant reaches
a certain age, which is currently 72. Essentially, this requirement is in place to ensure the IRS collects at
least some taxes on a retirement account prior to the participant’s death.

Now, the problem with these distributions is that many retirees forget to take them and the IRS penalty
for not taking the distribution is significant, of the 50% of the amount the participant was supposed to
receive, if you can believe that. Planned sponsors do their best to track down retirees, but it can be a
difficult task and sponsors also face consequences on the plan level for not completing these
distributions. Now fortunately, Congress has been sympathetic of late to the plight of planned sponsors
and retirees by increasing the initial RMD age from 70 and a half to 72 and eliminating RDS entirely in
2020 due to the pandemic.

Maybe one day, the provision has been the thorn in the side of many retirement plans will be eliminated
permanently or further pushed out, at least beyond age 72, as longevity continues to increase. Until
then, RMDs for retirement is age 72 or older will generally resume by December 31st, 2021. For
Revamping Retirement, I’m Mike Webb. And this has been your Minute with Mike. Now back to Jennifer
and Scott.

Scott Matheson:
All right. We’re back folks. Thanks as always to Mike Webb for the great and timely update.
Interestingly, my mom just retired and while she has a few more years before she needs to take her
RMDs, I’m actually going to use your segment as a way to trick her into listening to our podcast. I
actually, figure that might be the only way that happens. All right, we are back for the last segment and
Jennifer and I are thrilled to be joined by our CIO, our chief investment officer, Mike Vogelzang. To
continue with this episode’s theme of a mid-year check-in. For those of you that haven’t met Mike, as
our CIO, he leads our 34 person investment group. He also chairs our investment committee. This is the
group alongside Mike, who’s responsible for over 60 billion in client assets we manage with discretion
and also is responsible for the economic and market views and assumptions that impact the other 600
billion or so in client assets that we advise to.

Well, I know he doesn’t look like it. Mike has more than 38 years of experience. He’s frequently featured
on CNBC for his expertise and commentary. So we’re pretty humble that he was willing to come slum it
with us on our podcast for the next few minutes. So with that, welcome Mike. And thanks for joining us
today. It’s obviously, pretty quiet times in the economy and market these days and not much
uncertainty out there, so I’m sure we don’t have anything to talk about. Right?

Michael Vogelzang:
Right. Exactly. First of all, I appreciate you telling everybody how old I am. That was helpful.

Scott Matheson:
Yeah, yeah. Yeah.

Michael Vogelzang:
That was thoughtful. No, I think you’re you’re right. We’ve had a pretty volatile and … Actually, from a
student’s perspective, a fascinating market environment over the last year that has given us all kinds of
interesting things to talk about, to think about, to invest for and toward. Again, it’s been not without its
challenges, of course. And of course the human toll of COVID, but from an economics period in time, it’s
really been an interesting … I don’t want to say experiment because it’s not been an experiment, but
we’ve never done this before. So in some ways it is an experiment.

Scott Matheson:
Yeah. Very different then what you studied back in the ’50s, when you were in college. Right?

Michael Vogelzang:
Thanks, Scott.

Scott Matheson:
All right Jennifer, get us back on track will you?

Jennifer Doss:
Yeah, I think I have to. Mike, like you said, I don’t think we have any easy questions for you today, so I
apologize in advance, but like you said, there’s a lot of uncertainty out there. We kind of turn to you for
some of those answers. So we’re going to talk about interest rates first. And you’ve talked about this a
little bit in some other videos and things that you’ve done recently. I guess there’s a couple of impacts
there. It impacts all of our business lines, but particularly, we have a large pension business and
obviously, lower interest rates. We’ve had those liabilities pretty much stagnate or again, in some cases
increase. It also impacts again, broad retirement. Where you’re getting lower yields. So I guess, talk to us
about interest rates, any thoughts there on what we can expect?

Michael Vogelzang:
Yeah. Start with an easy question, that’s helpful. To back up a half a step from there and then get to the
level of interest rates and the point there. The first thing is, after a complete and full stop in the
economy, we’re now booming. The market and the economy is booming. It doesn’t get any better.
Corporate profits are soaring. The number of companies that beat Wall Street estimates was 87% this
last quarter. And that’s never happened. Effectively, the Wall Street analyst community was pantsed.
They didn’t have a chance at getting it right. And so now, we’re going to see how quickly they recover.
We’re just at the beginning of the second quarter earnings season. So that’ll be interesting to see how
much … We know the economy is booming. We know corporate profits are booming. Those are all good
things.

The problem that those bring is that it can also mean inflation. And we certainly, see some inflation
today. The real debate on inflation is whether or not it’s going to be permanent or what percentage of it
is going to be permanent or sticky as opposed to transitory or cyclical? The bottom of the market was
reached last year, as a result … The biggest single contributor to the current inflation rate is, believe it or
not used cars. They’re up almost 40% year over year. Well, I can pretty much guarantee you that used
cars aren’t going to be at 40% next year. That’s not going to happen. It’s unlikely, anyway. That’s of
course caused by supply chain issues with new car construction. And so there’s simply no new cars to
buy. So people buy used cars.

You’ve seen this, this sort of one time increase in the price of used cars. We expect those will settle
down. The price of lumber has gone up, it went up six fold at one point, added $40,000 to the price of
the home. It’s now down 40% from its peak. So you’re already seeing some roll over in some of the
really most cyclical inflation. The problem is, that inflation expectations are what drive interest rates.
And right now, interest rates are remaining relatively benign. We haven’t seen expectations for inflation
and long-term interest rates rising much. The Fed has been uber dovish in terms of keeping rates low. So
the homeowner’s association that we live in around interest rates, and by that I mean, those rates are
set by the Fed. The Fed controls both the short term now, and even the long-term rates much more than
they ever used to. That dynamic is not going away. The Fed is going to maintain control there.

So we expect the Fed to keep them relatively low for the foreseeable future, in any case. The real
challenge for interest rates to move up and I know low interest rates provide a real roadblock and
difficulty to match longterm liabilities. That’s the problem. The challenge is, overseas we still have
negative interest rates. If you’re a large international allocator like an insurance company, why in the
world would you put money in German bonds when you’re in the boons, when you’re looking at
negative 5.5%? When you can roll them overseas to a US dollar that hopefully is going to be increasing
and get one and a half or two percent in the treasury or corporate market.

So that’s going to be a natural lid on our long-term interest rates. And so I don’t think we’re going to see
the days of four and five percent coupons at any time soon, which I know for insurance companies, for
defined benefit plans and those would with long-dated liabilities, it makes life really difficult.

Scott Matheson:
All right, Mike. That’s awesome. I’m also excited to hear that the used car market’s going to get back to
some semblance of normal as my twin boys, my oldest are both turning 16 next year, and I was hoping
to get them in 1984 box steel frame Volvo. And good to know I’m not going to have to pay new car
prices for that used car. So I appreciate that.

Michael Vogelzang:
Scott, why don’t you just give them yours?

Scott Matheson:
Yeah. Yeah. So like I said, I was going to get them in 1984 Volvo, maybe you missed that part. Yeah. No,
not having my car, not happening. All right. Real quick, you talked a lot about the Fed obviously,
controlling the interest rates. The other aspect of kind of the recovery and things like that is clearly fiscal
policy. You talked in your video a lot about the handling of the baton. The private sector kind of went
underground. Everybody worked from home, we got back to governments, really propping up the
economy. And now we’re trying to unwind that. Talk a little bit about the risks there.

Michael Vogelzang:
Yeah, that’s exactly right. We’ve got in some material we have, a wonderful chart that shows effectively,
the drawing up of private spending during both the global financial crisis in ’08 and also during COVID in
’20. What happened is of course, is a powerful use of government when they stepped into that breach.
When private spending falls away, government spending can pick up and take over the baton of
leadership. Now we’re in a position where the private sector is roaring back, and we have to hand that
baton back to the private sector. Handoff leadership to the economic engine away from government we
hope, back to the private sector. The challenge with that, is it becomes fraught with potential for error.

And when I say error, I’m talking about policy error.

There’s two places policy error could come from in the economic environment. One is fiscal policy,
where the folks in Washington DC, particularly given that we don’t have a bipolar government at the
moment, we have all three areas in the government lined up in the democratic party. We know that
makes for a great recipe to spend. And so we could end up seeing too much fiscal spending that would
overheat the economy. Particularly, if it would be hand in glove with monetary policy run by the Federal
Reserve, that’s too dovish. And so the key there is that both of these have to be working together in
some level or some semblance of coordination, so that we don’t get an overheated economy and get
inflation coming back full time. That’s the policy error.

The other policy error of course, could be that they choke off the recovery before it’s really ready to go. I
think that likelihood given today’s government is very, very low. We think that’s really the only way
we’re going to get inflation in a different regime. So far, we’ve had inflation in really low … Low inflation
regime for the last 10 years. We would expect that without a policy error, we’ll settle back into that
same level. Policy error could change that. And so we give that maybe a 10 or 15% chance of happening.

So it’s really not investible yet, it’s hard to invest for a longterm on a 10 or 15% outcome, but we’re
thinking about what happens. We’re watching it. We’re seeing what’s going to happen with taxes with
private spending of course. The private side of the economy gets overheated and then you dump on a
huge amount of fiscal spending. And you could end up with a more difficult and challenging
environment.

Jennifer Doss:
So Mike, on the topic of taxes, I just want to hinge on something you just said. Because you talk about,
we have all three areas of the government in the democratic party, and that can lead to a lot of
spending. Obviously, then you talk about, how are you going to raise money? And you’re going to raise
corporate taxes or personal taxes. And there’s been a lot of discussion about that. How do you pay for
these things? We also have a deferred comp non-qualified practice. And so that’s been coming up a lot
with corporations in terms of thinking through. Both from their own perspective, their own corporate
taxes potentially raising, but then also from more of their high net worth employees that might work
there. How do they help them maybe shelter some more taxes, if we do see tax rates go up? So we’ve
been getting a lot of interest from those clients in terms of looking to start a non-qualified plan, or
again, looking to revamp one that they have. So I guess, any thoughts on taxes?

Michael Vogelzang:
Yeah. We’ve talked about this a fair amount in the investment committee and the implications for both
corporate profitability and also for our client base. I think the only thing we can say for certain at the
moment is, that we expect higher taxes across the board. Whether that’s higher capital gains rates,
which we know is going to likely happen. Higher marginal tax rate at the retail or personal level. And
then certainly a higher corporate rates are being worked on. Here’s a good example of a policy error, if
you get all of that tax increase at a time when the economy remains weak, it could end up tilting us into
a less than optimal recovery. Even though, it looks like we’re booming today, it’s still relatively nascent.

So yeah, we expect tax rates to go up. I think this is the full employment act for taxes and CPAs and ex
accountants. They’re going to be full of strategies to find new and interesting and clever ways to get
around whatever tax hole, taxes get built. For example, with high net worth clients, it may be time to
take capital gains, which is something nobody wants to hear, but you may actually, voluntarily want to
take capital gains while they’re still at a lower rate. You might want to pull forward income that you can
from future years. So you can get it taxed at lower rates, if you’re going to be in a high tax bracket. For
corporation income statements, there’s all of those things. Whether it’s deferred comp, whether it’s …
Again, the incentives become trying to push income down or accelerate income before those tax rates
happen. This is a typical thing that happens in with government. The policy that can sound wonderful,
can actually have all kinds of unintended consequences. And that’s my biggest frustration with sort of
activist government is, not so much the policies, but the lack of awareness of the unintended
consequences and how that can impact things in a way that frankly, it’s really hard to predict. And I
know this is crazy, but I wish politicians were a little more humble that and I wish fairies were real too,
but that’s the way life works.

Scott Matheson:
Wait, fairies aren’t real?

Michael Vogelzang:
Sorry, Scott. Sorry, to disappoint.

Scott Matheson:
I’ll come back to that. All rightMichael Vogelzang:

We’ll, talk about Christmas later.

Scott Matheson:
What? I think it was Benjamin Franklin said, “In this world nothing is certain except death and taxes.”
What I just heard Mike Vogelzang say, is that in the near future, nothing is certain except for taxes
increasing. So we’ll see what the extent of it is of course, but stay tuned on that. All right. Just a freebie
for you here, Mike. You talked about a lot in the video. We didn’t get to it all today. Anything else you
think that planned sponsors need to be thinking about right now or maybe even just employers broadly,
trends you’re seeing out there that are interesting or they should be aware of?

Michael Vogelzang:
Yeah, I think there’s two things, I would say here. One is, the battle between technology and labor has
never been sharper. And I think the COVID pandemic lockdown accelerated that trend towards more
technology. I would imagine that … Companies during the pandemic worked incredibly hard to lower
their cost levels. And as a result, they invested in lots and lots of new technology, whether it’s Zoom or
Teams or collaboration software, or whatever the case. Automation for lower skilled wages. I just think
that’s going to be sharper and more difficult as we go forward. Technology versus labor thing is going to
happen.

The other thing I think that’s important for mostly investors to be aware of is, really the demographic
trends. The US remains the demographic shining star on the hill compared to every other developed
country. We allow immigration. That’s a good thing, by the way, it allows us to bring in additional
workers and we keep our productivity growing. You don’t want to beat Japan. You don’t want to be
Germany. And even China is really facing a massive demographic cliff fairly soon. So those are really
important long-term things. It’s hard to equate them or bring them forward into today’s marketplace.
But my goodness, those are … Demographics is destiny, you’ve heard that phrase. And we’ve got a
wonderful demographic picture here in the United States. And I think some of our competitive countries
economically are facing much more difficult situations than we are. So that’s also going to have a role
here to play as we work through the next sort of decade or so.

Jennifer Doss:
All right, Mike. Scott gave you a freebie, but I’m going to bring us home with a really hard hitting
question. Like you’re on 60 Minutes here.

Michael Vogelzang:
Uh-oh.

Jennifer Doss:
This is Revamping Retirement and retirement is personal. And I know that you are … We’re not going to
let you. And you are still a very long way from retirement, no matter what Scott says about you in the
beginning about your age, don’t worry about that. We want to know what does retirement look like for
Mike Vogelzang?

Michael Vogelzang:
Wow. First of all, it would be location. My wife and I are really fortunate to have a great place up in
Maine. We just love it up here. So that’s probably where we’ll be spending a lot of time. We’ve got five
children and they’ll be all over the country before this is all said and done. So we’ll probably be spending
time with them all over the country. So a lot of travel. Grandkids, some are here and others are
percolating. So we’ve got all of that sort of family stuff. I think one of the biggest things that I know I’ll
have to face is some sense of what to do with life? What’s meaningful? I’m fairly involved in some
charitable organizations now, but I think that will get ramped up. I do a lot of investment work on
volunteer committees, both locally and nationally. And I would imagine, a lot of board work would be in
my … That would be my perfect drop, if I could do that.

But above all that, I just want to ride my bike. I’m a bicyclist. I just like to ride my bike. I’m always
struggling for trying to find time for doing that, when I’m working. So that’s a big draw to me, is just
getting on my bike and going for a daily ride. It’s really important for my mental health.

Scott Matheson:
Think about what the technology for bikes is going to be like in 10 or 15 years, when you actually start
thinking about retiring.

Michael Vogelzang:
It’ll be like sitting in front of, I don’t know, a video game.

Scott Matheson:
There you go.

Jennifer Doss:
I think they have that now, guys.

Michael Vogelzang:
I think they do, but there’s nothing quite like it. So that’s a fun thing.

Jennifer Doss:
Yeah. They got to replicate that wind in your face feeling. I get that.

Michael Vogelzang:
Yeah. Those are called fans, Jennifer. So that’s okay.

Jennifer Doss:
Oh.

Michael Vogelzang:
They have those.

Jennifer Doss:
They do have those too. Man.

Michael Vogelzang:
Yep. Right along the industrial curve, for sure.

Jennifer Doss:
All right. Well then, I don’t know why you need to retire, but anyway.

Michael Vogelzang:
You asked the question, not me.

Jennifer Doss:
All right. Well, Mike. We really appreciate it. We’ve taken a lot of your time. We appreciate you being
here with us. If you do want to see what Mike actually looks like. If you want to see his face, I know you
got a video coming out soon. That’ll be on our website. So please check that out. So we appreciate that.
And thank you guys all for listening to another episode of Revamping Retirement. We’ll see you next
time.

Narrator:
The discussions and opinions expressed in this podcast are that of the speaker and are subject to change
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