COLLECTED WISDOM™ on Legislative and Washington DC Actions Impacting Retirement Plans

A directory and index of articles that review what is happening in Congress and Washington DC.

Insecurity for ERISA's Retirement Security Rule After Trump's Election?

The election of Trump is expected to have significant consequences for federal agencies, particularly regarding the Retirement Security Rule under ERISA. There is speculation about whether financial institutions will begin to dismantle their compliance efforts related to rollover solicitations due to the fluctuating regulatory stance of the DOL on the definition of "investment advice" in ERISA's fiduciary rules. This ongoing uncertainty may finally be nearing resolution, suggesting that clarity on the future of ERISA's fiduciary rules could be forthcoming.

Source: Wagnerlawgroup.com, November 2024

Five Ways Trump's Election Could Change Employee Benefits

Attorneys are preparing for potential changes to tax, investment, and health policies that could arise from Donald Trump's second term as president, particularly regarding employee benefit plans. Trump's administration is expected to roll back regulations established under President Biden related to retirement advice, investment selection, and healthcare protections. Brigen Winters from Groom Law Group emphasizes that the expiration of tax provisions in 2025 will be a critical issue impacting employee benefits and retirement health benefits.

Source: Wagnerlawgroup.com, November 2024

Lisa Gomez Expects Fiduciary and ESG Rules to Face Reversals Under New Administration

Assistant Secretary of Labor Lisa Gomez indicated that the incoming Trump administration may implement changes to retirement security regulations and financial fiduciary standards. Speaking at the PLANADVISER 360 conference, she noted that the Department of Labor's existing retirement security rule, which defines when financial professionals become fiduciaries for retirement plan participants, might not align with the new administration's priorities. These changes are expected to significantly impact retirement plan investing and ESG guidelines.

Source: Planadviser.com, November 2024

Will It Be Feast or Famine for Retirement Policy in the Lame Duck?

As President-elect Trump prepares to return to the White House and Republicans gain control of Congress, the upcoming lame-duck session will involve finalizing unfinished legislative business. The outcomes of the recent election are expected to influence proceedings, as outgoing members may seek to leave a legacy. However, the potential for passing retirement policy legislation will largely depend on lawmakers' willingness to discuss issues beyond essential bills.

Source: Napa-net.org, November 2024

Another Trump Term May Change Tax Treatment of Retirement Plans

With President-elect Donald Trump securing another term as president, retirement industry experts believe there will be various implications on retirement plans and policy in the coming four years, including the risk of changes to the deferred-income-tax treatment of most retirement plan contributions, sources said.

Source: Plansponsor.com, November 2024

ERISA Experts See Regulation Pullback as Key Theme of Trump Rule

The return of President-elect Donald Trump and a potential Republican majority in Congress is expected to significantly impact the employer-sponsored retirement plan industry. Experts anticipate several changes, including the likely repeal of the fiduciary rule, a shift in how environmental, social, and governance factors are considered in investments, continued tax cuts, and more relaxed regulations on alternative investments in defined contribution plans. While some changes may enhance services, there are concerns about potential obstacles, such as efforts to find revenue from tax-advantaged savings and the dropping of a proposed national individual retirement account mandate.

Source: Planadviser.com, November 2024

How Plan Advisers Are Reacting to Trump Election Win

In the wake of the recent U.S. presidential election, retirement plan advisers are focusing on helping plan sponsors and participants navigate its potential effects on markets and economic policies. Phil Sherman, a senior consultant at Deschutes Investment Consulting, noted the strong emotional reactions among participants, ranging from excitement to distress. He highlighted the responsibility of advisers to help manage these emotions and emphasize the importance of maintaining a steady, long-term investment approach. Advisers are encouraged to continue educational efforts in 2025 and beyond, reinforcing that political shifts typically do not have a lasting impact on market returns.

Source: Planadviser.com, November 2024

Election 2024: What Could the Results Mean for Retirement Policy?

The Republican control of the Executive Branch and the Senate could significantly impact retirement and tax policies, although the House of Representatives control is still uncertain due to outstanding races. Former President Donald Trump has regained the presidency but has not proposed substantial policies on retirement security, aside from eliminating taxes on Social Security benefits. His administration is expected to aim at reversing various Labor Department initiatives that were established under Biden.

Source: Asppa-net.org, November 2024

Industry Watchers Point to Fiduciary Rule, ESG, Markets After Trump Win

As of Wednesday morning, the U.S. financial services industry is bracing for potential changes under a Donald Trump-led Republican administration. This could impact various aspects of employer-sponsored retirement plans, particularly fiduciary standards and Department of Labor priorities. Matthew Eickman, chief legal officer for the Fiduciary Law Center, predicts that a Republican-controlled administration and Congress will likely reverse many of the Department of Labor's regulations established in the past four years, including the recent fiduciary rule abandoned during Trump's first term.

Source: Planadviser.com, November 2024

What a Possible GOP Election Trifecta Means for Retirement Policy Issues

The potential for a Republican trifecta -- control of the Executive Branch and both chambers of Congress -- could dramatically reshape retirement and tax policies in the United States. While Trump's campaign has not introduced comprehensive policy initiatives to bolster retirement security, he has suggested eliminating taxes on Social Security benefits. His anticipated administration is expected to reverse various Labor Department measures implemented under President Biden. The evolving political landscape raises critical questions about the future of retirement and tax policies, with implications for American workers and retirees.

Source: Napa-net.org, November 2024

Bill That Would Allow CITs in 403bs Before Senate

Legislation that would allow 403b plans to invest in collective investment trusts has been introduced by several Senate Banking Committee members, including the ranking Republican, an indication of growing acceptance of the idea. The legislation originates in part from feedback Sen. Scott received concerning the capital formations framework he released almost a year ago, a roundtable he convened concerning ways to boost minority community access to capital.

Source: Asppa-net.org, September 2024

House GOP Continues Attacks on ESG Investing

The House of Representatives hosted another hearing on September 10 in which House Republicans characterized ESG as "woke" and an attempt to steer investor dollars toward social causes, at the financial expense of those investors and their retirement security. The hearing was hosted by the House Committee on Financial Services Subcommittee on Oversight and Investigations.

Source: Napa-net.org, September 2024

Legislative Proposals Affecting Retirement Plans: A Washington, DC Recap

The retirement landscape in the United States is a pressing concern, with policymakers and industry leaders urgently seeking solutions to ensure financial security for Americans in their later years. Two pieces of proposed legislation, the Automatic IRA Act of 2024 (H.R. 7293) and the Retirement Savings for Americans Act (H.R. 6065/S. 3102) have sparked intense debate and raised crucial questions about the future of retirement savings in the country.

Source: Cuiwealth.com, August 2024

Bipartisan Bill to Widen Savings Access for Young Employees

Helping Young Americans Save for Retirement Act, presented last week by Rep. Brittany Pettersen and co-sponsored by Rep. Tim Walberg, would revise ERISA to expand savings access for workers between 18 to 20 years old.

Source: 401kspecialistmag.com, August 2024

When Are Those SECURE 2.0 Technical Corrections Coming?

Since a technical corrections discussion draft was distributed in December, there have not been any major legislative updates. This poses issues for plan sponsors in search of clarity on important provisions in the SECURE 2.0 Act of 2022 that need correction.

Source: Napa-net.org, August 2024

Senators Introduce Bipartisan Bill to Allow CITs in 403bs

A bipartisan group of Senators introduced a bill on Aug. 1 to allow 403b plans to include collective investment trusts as part of their investment menu options. The bill, S.4917 mirrors a version passed in the House on March 8.

Source: Asppa.org, August 2024

Are the Floodgates About to Open After the Demise of Chevron Deference?

In 2021, the DOL adopted a new rule that interpreted ERISA to allow retirement plan managers to consider the ESG factors. The new rule was immediately challenged by a group of states, companies, and trade associations. The district court, following the mandate of Chevron, deferred to the interpretation of the current DOL and rejected the challenge. Plaintiffs appealed. And then SCOTUS overruled Chevron. In a new decision, a three-judge panel of the Fifth Circuit has elected not to answer that weighty question on appeal "Given the upended legal landscape, and our status as a court of review, not first view, we vacate and remand so that the district court can reassess the merits." Are we about to see a slew of these types of decisions revisiting agency regulations after the demise of Chevron?

Source: Cooleypubco.com, July 2024

Open Season for Regulatory Challenges: Supreme Court Overturns Chevron Deference and Expands Opportunities to Attack Federal Rules

On June 28, 2024, in a 6-3 decision, the Supreme Court overturned Chevron v. Natural Resources Defense Council, the most-cited case in administrative law. Chevron established a framework for how the federal courts decide challenges to agency interpretations of statutes and served as a bedrock support for upholding agency interpretations of statutes for the last 40 years.

Source: Groom.com, July 2024

House Committee Vote on "Stop Biden's Fiduciary Rule" Set

A resolution to disapprove the DOL's "Retirement Security Rule" could come up for a full floor vote of the House of Representatives before long if a House committee passes the resolution during a vote on Wednesday in Washington, D.C.

Source: 401kspecialistmag.com, July 2024

Chamber of Commerce, ERIC Plead for Fewer Retirement Plan Disclosures

Industry groups have asked the Department of Labor, Internal Revenue Service, and Pension Benefit Guaranty Corporation to simplify and improve retirement plan disclosures with specific recommendations in response to a request for information issued by the DOL in January. The interest groups agree that most participants do not read nor understand many disclosures related to their retirement benefits.

Source: Planadviser.com, June 2024

Senators Introduce Bill to Boost Small Biz Retirement Plan Start-up Credit

Legislation that would make it easier for small businesses to fully cover the administrative costs of starting a retirement plan for their employees was introduced in the US Senate this week by a bipartisan pair of senators.

Source: Napa-net.org, May 2024

Bills to Nullify the Retirement Security Rule Proposed in Congress

Members of the House and Senate introduced companion bills under the Congressional Review Act that would nullify the Department of Labor's Retirement Security Rule. The rule was finalized in April and would subject one-time transactions such as annuity sales and rollovers to fiduciary obligations under ERISA.

Source: Plansponsor.com, May 2024

2024 DOL ERISA Investigation Update: Recent Publications Offer Insight Into Possible Areas of Focus

The DOL maintains a robust investigatory program for auditing employee benefit plans for potential ERISA violations. ERISA plan fiduciaries and service providers can expect the DOL to continue its ever-evolving enforcement program targeting both fiduciaries and nonfiduciary service providers. Recent reporting by the DOL provides insight into its current official and unofficial enforcement priorities and may help plan fiduciaries and in-house counsel seeking to track the DOL's enforcement activities.

Source: Morganlewis.com, May 2024

DOL Acting Secretary Fends off Fiduciary Rule Attacks Before House Hearing

A contentious congressional hearing that was billed as "examining the policies and priorities of the Department of Labor" ended with a member of Congress calling for the resignation of Acting Labor Secretary Julie Su. The hearing featured few, if any, questions about the SECURE 2.0 Act, and instead featured numerous questions and criticisms about the DOL's recently finalized fiduciary rule, as well as Su's service in an acting capacity.

Source: Napa-net.org, May 2024

DOL Finalizes Amendment to QPAM Exemption

The DOL has completed a final amendment that would allow parties related to employee benefit plans and individual retirement accounts to engage in transactions involving plan and IRA assets. The final amendment on the Class Prohibited Transaction Exemption 84-14, otherwise known as the Qualified Professional Asset Manager Exemption (QPAM), responds to changes in the financial services industry since the exemption's 1984 establishment.

Source: 401kspecialistmag.com, April 2024

Legislation Calls for Retirement Plan Marketplace in Wisconsin

If bills before both chambers of the Wisconsin legislature are enacted, America's Dairyland will have a retirement plan marketplace to connect individuals and small employers with retirement plans offered by private financial services firms.

Source: Napa-net.org, March 2024

DOL Releases Proposed Regulations for Automatic Portability Transactions

The DOL has released proposed regulations related to the implementation of section 120 of the SECURE 2.0 Act. Section 120 of SECURE 2.0 amended the Internal Revenue Code to add a prohibited transaction exemption to permit the receipt of fees and compensation by an automatic portability provider for services provided in connection with an automatic portability transaction. This exemption applies to qualified 401a plans (other than defined benefit plans), 403a plans, 403b plans, governmental 457b plans, and traditional and Roth IRAs.

Source: Ascensus.com, March 2024

Bill to Ban ESG Consideration in Retirement Plans Floated by House Republicans

Another attempt at legislation to restrict the use of Environmental, Social, and Governance (ESG) factors in retirement plans was introduced in the House last week, this time by Congressman Greg Murphy, M.D. The "Safeguarding Investment Options for Retirement Act" seeks to prohibit tax-advantaged retirement plan trustees from considering factors other than financial risk and return when making investment decisions on behalf of workers, retirees, and their beneficiaries.

Source: 401kspecialistmag.com, March 2024

CITs in 403bs Bill Headed to Senate

A bill that would authorize the use of collective investment trusts in 403bs is headed to the Senate after the House of Representatives passed it. The Expanding Access to Capital Act (HR 2799), sponsored by House Financial Services Committee Chair Patrick McHenry, includes three measures that were approved as amendments, including the 403b plan measure.

Source: 401kspecialistmag.com, March 2024

Retirement Savings System Under Fire at Senate Hearing

A hearing that was billed as "taking a serious look at the retirement crisis in America" with a focus on improving the defined benefit system ended with witnesses agreeing that some reforms are needed, but calling for drastically different measures.

Source: Asppa.org, February 2024

Senate HELP to Hold Hearing on Confronting the "Retirement Crisis"

Amid the recent attacks on the 401k savings system, the key Senate committee with jurisdiction over ERISA plans to hold a hearing on Wednesday, Feb. 28 to examine what it describes as "confronting the retirement crisis facing working class Americans."

Source: Ntsa-net.org, February 2024

Federal Auto-IRA Bill for Uncovered Workers Introduced in the House

House Ways and Means Committee Ranking Member Richard Neal introduced a bill to establish a federal auto-IRA for employers with more than 10 employees who do not currently sponsor a retirement plan. The Automatic IRA Act of 2024 (H.R.7293) would require employees to be automatically enrolled in either an IRA or some other "automatic contribution plan or arrangement," like a 401k. It would apply to plan years beginning after 2026.

Source: Napa-net.org, February 2024

Can 403bs and CITs Some Day Be Friends?

403b plans still may not use collective investment trusts, an investment similar to a mutual fund that is subject to fewer regulations and requirements and often carries lower fees for defined contribution retirement plans. But, legislation to permit the pooled investment into 403b plans continues to inchworm its way through Congress.

Source: Planadviser.com, February 2024

Lawmakers Propose to Give Kids a Head Start in Saving for Retirement

A powerful group of Democratic lawmakers has introduced legislation to help children start saving early for retirement by establishing a savings account for every child in America. The bicameral 401Kids Savings Act was introduced Jan. 31 in the Senate (S. 3716).

Source: Napa-net.org, February 2024

DOL Proposes SECURE 2.0 Auto-Portability Regulation

The Employee Benefit Security Administration has released a proposed regulation on automatic portability transactions under the SECURE 2.0 Act of 2022, the DOL announced. According to an announcement from the federal agency, the regulation seeks to help workers keep track of their retirement savings accounts by reducing cash-outs when employees switch jobs.

Source: 401kspecialistmag.com, January 2024

1st House Hearing on Fiduciary Proposal Falls Along Partisan Lines

The U.S. House Committee on Financial Services Subcommittee on Capital Markets hosted a hearing on Wednesday about the DOL's retirement security proposal, sometimes called the fiduciary proposal. The hearing proceeded largely along partisan lines, with Republicans pointing out flaws and Democrats noting merits.

Source: Planadviser.com, January 2024

Congress Voicing Concerns With DOL Fiduciary Rule Proposal

Many in Congress are joining thousands of the more than 19,000 commenters in voicing concerns with the DOL's controversial proposed "Retirement Security Rule: Definition of an Investment Advice Fiduciary." Fifty bipartisan reps sent a letter urging that the controversial rule be withdrawn, and the House Capital Markets Subcommittee will hold a hearing Wednesday to explore its necessity.

Source: 401kspecialistmag.com, January 2024

Bipartisan Bill Would Lower DC Plan Eligibility Age to 18

The Helping Young Americans Save for Retirement Act (S 3305) seeks to spur more savings by younger workers in DC plans. The bill would require sponsors of 401k and ERISA-covered 403b plans to let employees aged 18 through 20 contribute after they complete one year of service. However, employers could exclude these younger workers from receiving any employer-matching or nonelective contributions.

Source: Mercer.com, January 2024

Congress Proposes SECURE 2.0 Technical Corrections Bill

After a closer read, several inadvertent errors were identified in the text of SECURE 2.0. In an open letter to the Secretary of the Treasury and the Commissioner of the IRS, dated May 23, 2023, Congress identified those errors and explained their intention to propose a correction bill. On December 6, 2023, the House and Senate released a draft bipartisan SECURE 2.0 technical corrections bill. The proposed bill includes key corrections that are reviewed here, along with additional minor fixes.

Source: Erisapracticecenter.com, December 2023

A Benefits Wish List for 2024

The 50th anniversary of the passage of ERISA will occur in 2024, but there is still no definitive guidance on some of the provisions that were part of the original legislation. Guidance is needed on more recent legislation as well. Here is a list of steps that courts and Congress could take in the coming year to help stem meritless fiduciary breach litigation, better enable recordkeepers and plan sponsors to implement provisions of SECURE 2.0, and encourage the adoption of new plans.

Source: Cohenbuckmann.com, December 2023

New Bill Seeks to Allow Roth IRA Rollovers into Roth 401ks

Legislation introduced in House would correct oversight of current law prohibiting workers from rolling Roth IRA savings into workplace-based Roth retirement plans offered by employers.

Source: 401kspecialistmag.com, December 2023

Three Key Fixes in New SECURE 2.0 Technical Corrections Bill

An identical discussion draft containing several technical corrections and other SECURE 2.0 clarifications was released late Wednesday by both the House and Senate. The bill would correct errors relating to the inadvertent annulment of pre-tax catch-up contributions in 2024, make the contribution limit for new Starter-K plans equal to the IRA contribution limit as lawmakers intended, and fix a drafting error regarding RMDs, among several others.

Source: 401kspecialistmag.com, December 2023

What's on Tap for the Next Retirement Plan Policy Bill?

A year later, while most practitioners and retirement plan sponsors are focused on the implementation of the new SECURE 2.0 rules, Congress has quietly been putting forward new bipartisan proposals for consideration in the next round of retirement plan policymaking. Here are short descriptions of some of the proposals already introduced, and two specific legislative projects that the ARA is working on that are expected to be formally introduced in Congress soon.

Source: Napa-net.org, December 2023

House Passes Amendments Blocking DOL Fiduciary Rule

The House of Representatives voted on November 15th to pass key amendments in H.R. 5894, or the Labor, Health, and Human Services, Education, and Related Agencies Appropriations Act, that would prevent the DOL from using any allocated funds for its fiduciary proposal.

Source: 401kspecialistmag.com, November 2023

Bipartisan Bill Backs 401k Plans for Teen Workers

The Helping Young Americans Save for Retirement Act, introduced by Senators Bill Cassidy and Tim Kaine, would lower the participation age of ERISA-covered defined contribution plans to 18-year-olds under certain circumstances, according to a statement released by the U.S. Senate Committee on Health, Education, Labor, and Pensions.

Source: 401kspecialistmag.com, November 2023

House to Vote on Bill Blocking Funding for DOL's Fiduciary Rule

The U.S. House of Representatives will vote on a spending bill (H.R. 5894) that contains key amendments restricting funding for the DOL's recently proposed fiduciary rule.

Source: 401kspecialistmag.com, November 2023

Increased Retirement Plan Startup Credit Proposed for Micro Businesses

Representative Claudia Tenney has introduced the Retirement Investment in Small Employers (RISE) Act to encourage small businesses with no more than 10 employees who received at least $5,000 of compensation in the prior year to adopt retirement plans. The RISE Act would replace $500 with $2,500 for a "Qualified Microemployer."

Source: Ascensus.com, November 2023

Reps. Introduce RISE Act for Micro-Businesses to Offer Retirement Plans

A newly introduced bill would allow micro-sized businesses to enact full retirement plan startup tax credits and benefits originally offered in SECURE 2.0 legislation. The bill would incentivize businesses with under 10 employees to adopt retirement savings plans.

Source: 401kspecialistmag.com, October 2023

Controversial "Retirement Savings for Americans Act" Reintroduced in Congress

A bipartisan, bicameral bill that would make saving for retirement attainable for all American workers is once again on the Congress floor, and now backed by mega-corporations and industry leaders. If passed, the RSAA would allow the federal government to match contributions for low- and middle-income workers, with the match beginning to phase out at median income.

Source: 401kspecialistmag.com, October 2023

Legislation Opens Door for Cannabis Companies to Sponsor Retirement Plans

Legally operated cannabis companies could soon be allowed to sponsor retirement plans under legislation recently approved by the Senate Banking, Housing, and Urban Affairs Committee. By a vote of 14-9 on Sept. 27, the committee approved the Secure and Fair Enforcement Regulation Banking Act (the SAFER Banking Act, S. 2860) to provide protections for federally regulated financial institutions that serve state-sanctioned marijuana businesses.

Source: Napa-net.org, October 2023

Several Bills Amending ERISA Advance out of House Committee

The House Education and Workforce Committee held a mark-up of several proposals, including four bills, which would amend ERISA related to proxy voting, fiduciary duties, and notice requirements for brokerage windows.

Source: Ascensus.com, September 2023

Republican Leaders Discourage 3(21) Fiduciary Rule Amendment

Updating the fiduciary rule remains a key area of focus for the DOL, despite missing a published August timeline. However, Representative Virginia Foxx, R-Virginia, and Senator Bill Cassidy, R-Louisiana, published on Thursday a public letter to Julie Su, the acting director of the DOL, discouraging the department from proposing a revised 3(21) fiduciary rule.

Source: Planadviser.com, September 2023

401k Spousal Consent Bills Quietly Reintroduced in House and Senate

House and Senate Democrats quietly reintroduced bills on Thursday to require spousal consent for 401k distributions. H.R.5060 and S.2627 would "amend the Employee Retirement Income Security Act of 1974 to provide for greater spousal protection under defined contribution plans, and for other purposes," according to the bill's long title.

Source: Napa-net.org, August 2023

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