While wholesale policy changes are not expected in President Barack Obama's second term, some new Capitol Hill assignments have sparked a glimmer of optimism among retirement and investment industry observers.
As members of Congress grapple with a massive budget challenge only temporarily delayed by the short-term fiscal cliff agreement, having new committee members who really understand pension issues will be critical, observers say, in the next, even more heated, round of negotiations.
On the Senate side, that optimism came with the naming of Johnny Isakson, R-Ga., and Rob Portman, R-Ohio, to serve on the Senate Finance Committee. Both legislators, along with returning member Benjamin Cardin, D-Md., have solid reputations for understanding and carrying the ball on pension issues.
Messrs. Portman and Cardin joined forces more than a decade ago on pension legislation that among other things simplified discrimination rules and raised contribution limits for defined contribution plans. Both senators have been critical of the Department of Labor's proposed fiduciary rule, and have expressed interest in ways to spur greater defined contribution plan participation.
Like Jack Lew, Mr. Obama's nominee to head the Treasury Department, Mr. Portman has held an impressive variety of fiscally sensitive positions, including director of the Office of Management and Budget under President George W. Bush and serving as a member of the House Ways & Means Committee. He also served on the Joint Select Committee on Deficit Reduction, better known as the supercommittee, which attempted to deal with the last round of wrangling over the federal budget deficit.
When it comes to having people in place who can ensure a balanced debate between tax reform and pension protection, “Portman could very well be the one” said Tim Lynch, senior director of government relations for the Washington firm Morgan Lewis & Bockius LLP. “He's probably Lew's equivalent in terms of knowing (budget and tax issues) and he understands pensions. Isakson is a plus in terms of understanding pension law and ERISA, and marrying that with the IRS code.”