In working on behalf of retirement plans, retirement plan participants, and those who support them, one of the constants is the importance of a bipartisan approach, American Retirement Association CEO and ASPPA Executive Director Brian Graff stressed in his opening remarks at the 2022 ASPPA Annual Conference.
Retirement, he remarked in a non-traditional Washington Update format with “Shamanda” (conference co-chair and incoming ASPPA President-Elect Amanda Iverson and Shannon Edwards), “is one of the few things that is bipartisan” on Capitol Hill. Asked about the difference between the current environment and a decade ago, Graff said that working hard to keep retirement-related policy bipartisan remains “a cornerstone objective.”
Graff told Iverson and Edwards that Hill staff have been negotiating on retirement-related legislation since August. While he expressed strong optimism that it will eventually pass (though likely not till late in the year), he also noted that “There are lots of dynamics involved” and that “it’s Washington — anything can happen.”
He further noted that with a new Congress convening in 2023 — as well as the prospect that control of at least the U.S. House of Representatives could change alongside the retirement of long-time retirement savings advocate Sen. Rob Portman (R-OH) — “it’s possible the dynamics could change.” And he noted that “unfortunately, politics and policy go hand in hand.”
Still, Graff said that “It’s been remarkable how members on both sides have respected” the effort to be bipartisan, and that work will continue to keep it “as bipartisan as possible.”
Paper ‘Trail’
Graff recapped that Preston Rutledge, while he was Assistant Secretary of Labor for the Employee Benefits Security Administration, had announced at a previous ASPPA Annual conference the introduction of a regulation allowing the default form of participant notification to be statements sent in electronic form. However, there has been some opposition to that — notably from AARP, which contends that, at a minimum, at least one benefit statement should be provided on paper annually. He said that the matter “will have to be decided by the principals” in the end, and that hopefully there will be a compromise regarding providing statements electronically and on paper.
Saver’s Match
Graff noted that there is strong support in the Senate for changing the saver’s credit to a saver’s match, particularly among Democrats in the Senate. It would be a refundable tax-credit – meaning that individuals below certain income thresholds would be eligible, regardless of their tax obligation (the current Saver’s Match acts an offset to federal income tax liability). Moreover, this government-funded match would be made directly into a 401(k) or an IRA — which would result in $3 billion to $4 billion going from the Treasury into the retirement industry.
In response to Iverson’s question as to how that would happen, he reiterated his confidence that the industry would figure out a way to accommodate the additional savings. He also expressed the expectation that “there will not be a bill without a saver’s credit,” but that there will likely be adjustments.
Regulatory Reviews
Looking toward agencies, Graff touched on recent legislation that increases funding and staffing at the IRS. He remarked that actually, a low percentage of plans are audited, and that implementing the changes recently enacted will not happen immediately. He also stressed the importance of compliance and having “a system that is following the rules.”
With regard to the issue of cryptocurrency as an investment option in 401(k) plans, Graff referenced a recent interview with the Labor Department’s Tim Hauser on the issue, commenting that while the DOL had expressed concerns in view of the current status of “crypto” and uncertainty about the appropriate regulatory oversight, it hadn’t been prohibited outright.
And the Department of Labor could issue ESG guidance soon, Graff noted. But efforts to apply values actually are not new, he remarked, observing that “values-driven funds have been used for decades.” Further he said, they have not been uniform in their thrust and have been “all over the map” in their objectives.
References
In the Washington Update session, American Retirement Association CEO (and ASPPA Executive Director) Brian Graff referenced several documents — so, in case you’ve missed them…
- ARA Amicus Brief in the Booz Hamilton excessive fee case (involving BlackRock Lifepath target-date funds.
- ARA Responds to DOL RFI on Climate Change https://www.asppa-net.org/news/ara-responds-dol-rfi-climate-change
- Some Crypto Clarity—A Conversation with EBSA’s Tim Hauser https://www.asppa-net.org/news/browse-topics/some-crypto-clarity%E2%80%94-conversation-ebsas-tim-hauser
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