Government Affairs Update
August 9, 2021
IRI Advocacy Effort Wins ASAE “Power of A” Award
IRI won recognition from the American Society of Association Executives (ASAE) for its efforts to help Americans recover from the economic consequences of the COVID-19 pandemic. The “Power of A” Silver Award was presented to IRI for its efforts to advance a five-point plan to help workers and retirees hold on to their tax deferred savings longer, providing an opportunity for them to recoup any losses retirement savings account balances may have incurred. The plan also would expand opportunities for Americans to save as businesses reopened. IRI was joined in this effort by an industry coalition consisting of the ERISA Industry Committee (ERIC), Finseca, the National Association for Fixed Annuities (NAFA), the National Association of Independent Life Brokerage Agencies (NAILBA), and the National Association of Insurance and Financial Advisors (NAIFA).
In a press statement, IRI President and CEO Wayne Chopus said, “Our team is a dedicated, passionate group of professionals who work hard each day to deliver for our members and our industry. Achieving this recognition from the most prominent organization in the association community signifies IRI’s commitment to excellence on behalf of our members.”
Senators Booker and Young Introduced Trio of Retirement Security Bills
Last week, Senators Cory Booker (D-NJ) and Todd Young (R-IN) introduced three bills aimed at improving savings rates and access to workplace retirement plans. The Strengthening Financial Security Through Short-Term Savings Accounts Act (S. 2601) would create “stand-alone, short-term savings accounts” utilizing automatic contribution arrangements under the Employee Retirement Income Secure Act of 1974 (ERISA). These accounts would have a maximum balance of $10,000, have limited restrictions on withdrawals, and the funds would need to be made available to the account holder within 5 business days after termination with their employer. In a press statement, Senator Booker said, “With the pandemic forcing many families to dip into their hard-earned savings, including retirement funds, to cover unexpected costs related to challenges like healthcare costs, remote learning, and job loss, it’s essential that we provide workers with the tools they need to build savings.”
The Retirement Security Flexibility Act (S. 2602) would provide employers with an additional nondiscrimination safe harbor for automatic contribution arrangements, “expanding access to workplace retirement plans by giving employers more flexibility when setting up 401(k) plans for their employees” and “making it easier for savers to auto-enroll into long-term savings plans and more quickly escalate their savings.” The Commission on Retirement Security Act (S. 2603) would create a federal commission to study the “state of retirement security in the United States” including the move away defined benefit to defined contribution models, a review of private retirement coverage, and society changes and trends. The Commission would also report to Congress its findings and recommendations. In a statement, Senator Young said, “I’m glad to reintroduce a suite of bills to boost retirement security and help Americans save for the days ahead.”
Any questions should be referred to John Jennings.
Congressional Leaders Introduce Blueprint Item to Fund Adult Protective Agencies
Earlier today, House Ways and Means Committee Chairman Richard Neal (D-MA), Senate Finance Committee Chairman Ron Wyden (D-OR), Senate Special Committee on Aging Chairman Bob Casey (D-PA), and Elder Justice Caucus Chairwoman Suzanne Bonamici (D-OR) introduced the Elder Justice Reauthorization and Modernization Act of 2021. The bill would provide funding for programs aimed at helping to protect older and vulnerable Americans from abuse and neglect. This includes directing $1.4 billion dollars for the Department of Health and Human Services to allocate to improve the functionality of state and local adult protective services (APS) which are responsible for investigating reports of elder financial abuse and exploitation. IRI called on Congress to provide dedicated federal funding to state Adult Protective Services agencies to help the combat these crimes in the 2021 Federal Retirement Security Blueprint.
IRI staff is drafting a letter of support to be submitted to the bill’s sponsors.
Any questions should be referred to John Jennings.
IRI Submits Comment Letter Supporting Maryland’s Proposed Best Interest Regulation
IRI submitted a comment letter on behalf of its members providing support for Maryland’s proposed best interest regulation. In its letter, IRI offered comments to pursue alignment with the NAIC Suitability in Annuity Transactions Model Regulation. IRI will continue to monitor for any updates to the proposed regulation and will continue to advocate for consistency with the NAIC Model.
Any questions should be referred to Sarah Wood.
DOL Submits Proposed Rule on ESG and Proxy Voting to OMB for Review
Last Friday, the DOL’s Employee Benefits Security Administration (EBSA) submitted a proposed rule titled Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights (proposed rule) to the Office of Management and Budget (OMB) as the required procedural process prior to release of text the proposed rule itself. As you will see, the proposed rule incorporates both fiduciary obligations with respect to selection of ESG investments under the Trump Administration’s so-called ESG-Rule and related revisions to the related Proxy Voting Rule. Generally, OMB has anywhere between 30-90 days to complete its review of a proposed rule, however, following discussions with EBSA representatives and joint trades calls, we expect that OMB will send the proposed rule back to DOL sometime in September 2021. Once the DOL has released the text of the proposed rule, there will be an opportunity for notice and comment by industry stakeholders.
The proposed rule implements the direction from two Executive Orders issued by President Biden, Executive Order 13990 of January 20, 2021, titled Protecting Public Health and the Environment and Restoring Science to Tackle the Climate Crisis, and Executive Order 14030 of May 20, 2021, titled Climate-Related Financial Risks. IRI submitted extensive comments on the proposal of the ESG rule during the Trump Administration. The final regulation presented many outstanding concerns for our members, which we are hopeful the DOL representatives have considered in their outreach to stakeholders and upon review of the extensive comments received on the prior proposed rule.
IRI will monitor developments of this proposed rule closely and will report to members once there is the text of the rule to review, consider and respond to as part of our ongoing IRI advocacy efforts.
Any questions should be referred to Emily Micale.