Finance Committee Explores Bipartisan Retirement Solutions

On July 28, the Senate Committee on Finance held a hearing to explore ways to build on bipartisan retirement legislation to promote solutions to strengthen and enhance retirement security for American workers and retirees.  Finance Committee Chairman Ron Wyden (D-OR) used his opening statement to highlight the bipartisan approach the Committee has taken toward retirement legislation and address four policy areas he would like to see action on, including:  enhancing the “Saver’s Credit,” “matching” retirement savings with student loan repayments, portability of retirement savings, and “cracking down” on “Mega-IRAs.” Senator Mike Crapo (R-ID), the lead Republican on the Committee, also noted the Committee’s commitment to bipartisanship in the retirement security space and his desire to see the enactment of policies that encourage employees to save, make it easier and less expensive for employers to start plans, and adapt to ensure all workers are given the opportunity to save. Senator Crapo also praised Senators Ben Cardin (D-MD) and Rob Portman (R-OH) for their leadership in enabling the Senate to make “significant progress on this issue.”

Other members of the Committee questioned witnesses on similar lines, with many driving home the importance of improving access to workplace retirement plans, the utilization of multiple employer plans (MEPs) and pooled employer plans (PEPs), and making it simpler for small businesses to offer plans. Senator James Lankford (R-OK) also raised the Enhancing Emergency and Retirement Savings Act which would provide additional liquidity for certain retirement savings should a saver have a financial emergency. Senator Todd Young (R-IN) mentioned that he is working on introducing legislation – the Retirement Security Flexibility Act – which would provide small employers with flexibility by modifying nondiscrimination requirements on employer matching and encourages workplace plans to include automatic enrollment and escalation features.

IRI submitted a statement for the record of the hearing detailing IRI’s position on the eleven 2021 Federal Retirement Security Blueprint policy proposals and the Saver’s Credit enhancements contained in the Retirement Security and Savings Act and the Improving Access to Retirement Savings Act. The Blueprint proposals, in addition to the those already mentioned, include an increase to the RMD age, expanding opportunities for military spouses to save for retirement, increased catch-up contributions for Baby Boomers, the facilitation of greater use of lifetime income products such as QLACs and low-cost ETFs in Vas, and the establishment of a national retirement “lost and found” database.

IRI also issue a press statement in which IRI President and CEO Wayne Chopus called on Congress to take action on retirement security legislation. “Bipartisan, common-sense proposals now before Congress can provide much-needed help for America’s workers, retirees, and their families to build economic equity, strengthen financial security, and protect income in a manner that sustains them throughout their retirement years,” said Chopus. “Today’s hearing sends a clear signal that Congress is determined to deliver effective solutions to strengthen and enhance the retirement security for millions of America’s workers and retirees.”

Senators did not mention a timeline for action on legislation by the Committee. IRI will continue to monitor the Senate Finance Committee for action on retirement security legislation.

Any questions should be referred to John Jennings.

Lisa Gomez Nominated to Head EBSA

Employee benefits attorney Lisa M. Gomez was nominated by President Biden to serve as the Assistant Secretary for the Department of Labor’s (DOL) Employee Benefits Security Administration (EBSA). Gomez is currently a partner at Cohen, Weiss, and Simon in New York, where she chairs the firm’s management committee. The confirmation process for Ms. Gomez’s nomination will likely take about three months, meaning she would potentially take office in November or December. With this in mind, several forthcoming regulatory actions will occur prior to her arrival, including the final lifetime income illustrations rule and new proposals on ESG investing and proxy voting. Based on our current expectations, Ms. Gomez would likely take office before the DOL issues its new fiduciary proposal, so she would have some opportunity to influence that rulemaking effort. We are working to learn more about Ms. Gomez’s background and her views on the fiduciary rule and other IRI priorities, and we will seek an opportunity to meet with her once she is confirmed.

IRI will monitor the Senate for action on Ms. Gomez’s confirmation.

Any questions should be referred to Paul Richman or Jason Berkowitz.



Bill Lowering Barriers to RILAs Introduced in the House

Last week, Representatives Alma Adams (D-NC), Dean Phillips (D-MN), and Anthony Gonzalez (R-OH) reintroduced the Registration for Index Linked Annuities (RILA) Act (H.R.4865). Under current Securities and Exchange Commission (SEC) rules, RILAs and other innovative products, are registered using forms designed primarily for equity offerings and therefore require extensive information that is not relevant to prospective annuity purchasers. These forms also require disclosure of financial information prepared in accordance with generally accepted accounting principles (“GAAP”), which many insurers are not otherwise required to produce. The bill would require the SEC to develop new registration forms for RILAs to provide investors with relevant information needed for making decisions about the purchase of insurance products.

IRI submitted a letter of support to the bill’s sponsors, highlighting the inclusion of the legislation in the 2021 Federal Retirement Security Blueprint. IRI’s President and CEO Wayne Chopus also issued a press statement, saying, the current “regulatory structure ultimately impairs consumer choice without any corresponding benefit to consumers or the SEC. The modernized approach contemplated by this legislation will encourage innovation and ensure investors can easily find the information they need about RILAs and other innovative products without having to wade through irrelevant, excessive, and confusing disclosure documents.” 

IRI anticipates a companion bill will be introduced in the Senate in the weeks to come. IRI will continue to work with its RILA Task Force in pursuing the enactment of the RILA Act.

Any questions should be referred to Paul Richman or John Jennings.

IRI Supported Exploitation Prevention Bill Passes Out of Committee

The House Committee on Financial Services voted to approve H.R. 2265, the Financial Exploitation Prevention Act of 2021. The bill, introduced by Representative Ann Wagner (R-MO), would enhance protections for older and vulnerable Americans by increasing the time the redemption of a security or a fund if a registered open-ended investment company or a transfer agent suspects financial exploitation. The bill also directs the Securities and Exchange Commission (SEC) to report to Congress recommendations for legislative and regulatory changes to continue to combat financial exploitation. IRI submitted a letter of support for the bill in April, noting that IRI’s 2021 Federal Retirement Security Blueprint included a call for the adoption of enhancements to safeguard Americans from exploitation and fraud.

IRI will continue to monitor Congress for actions to safeguard older and vulnerable Americans.

Any questions should be referred to John Jennings.



Montana Files Proposed Rulemaking Following Best Interest Regulation

Montana’s Commissioner of Securities and Insurance formally filed proposed rulemaking with the Montana Secretary of State following adoption of the NAIC best interest model regulation. This includes formal adoption of the appendices to the NAIC model and provisions relating to implementation of the training requirements. Based on the feedback from IRI and others, Montana revised the original draft language to eliminate all the variations from the NAIC Model’s disclosure templates and training provisions. We intend to submit comments in support of the proposal unless any significant concerns are brought to our attention.

Any questions should be referred to Sarah Wood.