RETIREMENT LEGISLATIVE UPDATE

Keeping you informed about important retirement policy developments

Our commitment to helping people live their best lives includes keeping plan sponsors and financial professionals informed about critical issues affecting the retirement industry.

With midterm elections near, I thought it was a good time to touch base with Maurice Perkins, Transamerica’s Chief Corporate Affairs Officer. Maurice shared his insights on retirement reform and the potential impact of a lame-duck session.

HERE'S WHAT WE DISCUSSED...

PE: Since we last spoke, there’s been increased activity in Congress concerning SECURE 2.0 retirement legislation. Can you bring us up to speed?

MP: You’re right, it has been a busy few months regarding retirement-related legislation. If you recall, the House passed the bipartisan Securing a Strong Retirement Act in March, which included essentially all the provisions of two smaller bills reported by the House Ways and Means Committee and the House Education and Labor Committee. Once that bill arrived in the Senate, the Senate Finance Committee and Senate Health, Education, Labor and Pensions Committee marked up their own bills that included nearly all provisions of the House bill within their respective jurisdictions. House and Senate Committee Chairs and Ranking Members are now working in a bipartisan and bicameral fashion behind the scenes to craft a consolidated bill that the Senate could consider after the midterm elections but before year’s end.

PE: We discussed some of the bill’s most important provisions in our last conversation, but how does this legislation get done this year?

MP: There isn’t much time left this year, but House and Senate leaders and staff have been working on a bipartisan basis to iron out the differences between the House-passed bill and the bills reported by the Senate Finance Committee (the “EARN Act”) and the Senate Health, Education, Labor and Pensions Committee (the “RISE & SHINE Act”). Ultimately, we expect Senate leadership to offer one or more pieces of legislation that include all the provisions of each of these bills. We don’t expect many, if any, new provisions since that could disrupt the bipartisan balance of support. It’s unlikely that we’ll hear any senators talking about this legislation on the Senate floor since it will likely be included in an omnibus piece of legislation passed in the final days — or even hours — of the 117th Congress.

PE: So, is SECURE 2.0 likely to pass in the lame-duck session? Is anyone actively opposing it?

MP: We’re not aware of any senator or outside group that’s actively opposing SECURE 2.0. The outcome of the midterm elections may leave little time or even appetite to pass any substantive legislation during the remainder of the year. If Republicans win enough races to take control of the House or Senate next year, for example, they may oppose the idea of considering it this year thinking they may be able to craft a new package in the 118th Congress. If it’s not passed this year, the process must start again from the beginning since legislation does not carry over from one Congress to the next.

PE: There has been a lot of speculation that the Department of Labor (DOL) may propose a revised fiduciary standard like what was proposed by the Obama Administration and later judicially vacated. What do you see happening?

MP: What we do know is that the DOL has included such a rulemaking effort in its semi-annual workplan tentatively scheduled for December, but the DOL is not bound by its workplan, and its timing could slip for a few reasons. We also don’t know the details of what it would propose and would not know until any DOL proposal was reviewed and returned by the Office of Management and Budget. We do know that if the DOL proposes something like the Obama-era rule, it will face legal challenges likely alleging it has exceeded its regulatory authority.

PE: Speaking of the DOL, has it said anything further on the permissibility of cryptocurrency investments in qualified plans?

MP: We haven’t seen anything definitive from the DOL, but Sen. Elizabeth Warren of Massachusetts and others have certainly expressed concern about qualified plans offering crypto-based investments to retirement savers, especially given the recent market crash of such investments. The DOL may be waiting for the larger issue to be settled of which regulator(s) will have responsibility for overseeing crypto markets. Both the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) are vying for regulatory control. We may know more when we talk again in a few months after the midterm elections.

More to come

Transamerica will continue advocating for meaningful improvements to retirement-related legislation and regulation and keep you informed about critical issues affecting the retirement industry. We are committed to working with Democrats, Republicans, and Independents to pursue retirement policy that helps more people save for retirement.

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Transamerica and its agents and representatives do not provide tax or legal advice. This material is for informational purposes and should not be construed as legal or tax advice. For legal or tax advice concerning your situation, please consult your attorney or tax professional.

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