Last week, the Insured Retirement Institute (IRI) met with the White House’s Office of Management and Budget (OMB) to convey our thoughts and concerns on the Department of Labor’s latest fiduciary rule proposal, which has been under review by OMB since early September. During the call, we urged OMB not to clear the proposal for issuance based on four key arguments:
Rulemaking is Unnecessary and Redundant;
Lower and Middle-Income Workers Will be Harmed;
Federal Courts Have Repeatedly Rejected DOL Efforts; and
Rulemaking Would Be Inconsistent with Goals of Bidenomics and Recent Retirement Reform Legislation.
The OMB representatives listened to our comments, acknowledged that they understood our views, and encouraged us to continue to participate in the rulemaking process if and when the proposal is issued. While not definitive, OMB has no further stakeholder meetings on the schedule, leading to speculation that the proposal could be cleared for publication as early as this week. We will continue to closely monitor and keep our members apprised of any and all significant developments.
Hickenlooper & Tillis Reintroduce Retirement Savings Bill
On October 19, Senators John Hickenlooper (D-CO) and Thom Tillis (R-NC) reintroduced the Retirement Savings for Americans Act. The bill would create a federal program to provide eligible workers with access to portable, tax-advantaged retirement savings accounts. The bill would automatically enroll full and part-time workers and make independent workers eligible for participation. These accounts, according to a one-pager, would provide participants with a menu of “low-fee” investment options participants will be able to choose from. Low- and middle-income workers would also be eligible for a 1 percent automatic contribution and up to a 4 percent matching contribution in the form of a tax credit.
In a press statement, Sen. Hickenlooper said, “Americans who work hard their entire lives deserve to retire with dignity. This bill helps low-income workers enjoy a secure retirement and fulfill their American dream.” Sen. Tillis noted in a statement that “roughly 40 million Americans lack access to an employer-sponsored retirement plan […] the Retirement Savings for Americans Act tackles this real problem by establishing a pathway for savings for Americans lacking retirement options.”
A companion bill is expected to be introduced in the House of Representatives by Reps. Terri Sewell (D-AL) and Llyod Smucker (R-PA) in the coming days.
Regarding the Hickenlooper/Tillis bill, IRI has not taken a position in favor or against it when it was introduced during the last session of Congress. IRI has said that it agrees that there is a challenge in providing opportunities for workers, particularly employees of small businesses, to save through a workplace retirement plan during their working years, and more needs to be done to expand the opportunities for those workers to save. However, IRI believes that the solution offered by this bill to make all full- and part-time workers who lack access to an employer-sponsored retirement plan eligible for an account that would be established and maintained by the Treasury Department is not the approach that IRI would support to address this challenge.
Instead, IRI believes that the best approach to addressing the workplace coverage challenge is to enact a proposal offered by the House Committee on Ways and Means Ranking Member Representative Richard Neal (D-MA), which IRI has long supported. Rep. Neal’s bill has not yet been reintroduced during this session of Congress, but it is expected sometime this year. The Neal bill would generally require all but the smallest of employers to maintain an automatic retirement savings plan, into which employees would be automatically enrolled with the ability to opt-out. IRI prefers this approach because it would use the existing private sector retirement system to provide a solution versus a federal government-sponsored solution offered by the new bill.
IRI will continue to monitor for any action on the Retirement Savings for Americans Act.
IRI Standard of Conduct Resources
IRI maintains a standard of conduct website to provide members with easy access to information and helpful resources related to the various standards of conduct and ongoing rulemaking efforts. The website was recently updated with a new version of the Standard of Conduct Comparison Chart which now includes the Massachusetts fiduciary rule.
Additionally, a chart has been created to help members work through NASSA’s Best Interest Proposal by comparing the proposal to the requirements under Reg BI and NAIC Model Rule #275. We encourage you to check the website frequently as it is continuously being updated with new documents and information.
IRI Committee Calendar
Compliance & Implementation Committee Meeting
October 25 | Cancelled
Government Affairs Committee Meeting October 25 | 3 p.m. ET
IRI Town Hall & Business Meeting October 26 | 3 p.m. ET | Register