Skip to main content
MENU
Subscribe
  • Subscribe
  • Account
  • LOGIN
  • Topics
    • Alternatives
    • Consultants
    • Coronavirus
    • Courts
    • Defined Contribution
    • ESG
    • ETFs
    • Hedge Funds
    • Industry Voices
    • Investing
    • Money Management
    • Opinion
    • Partner Content
    • Pension Funds
    • Private Equity
    • Real Estate
    • Russia-Ukraine War
    • SECURE Act 2.0
    • Special Reports
    • White Papers
  • Rankings & Awards
    • 1,000 Largest Retirement Plans
    • Top-Performing Managers
    • Largest Money Managers
    • DC Money Managers
    • DC Record Keepers
    • Largest Hedge Fund Managers
    • World's Largest Retirement Funds
    • Best Places to Work in Money Management
    • Excellence & Innovation Awards
    • WPS Innovation Awards
    • Eddy Awards
  • ETFs
    • Latest ETF News
    • Fund Screener
    • Education Center
    • Equities
    • Fixed Income
    • Commodities
    • Actively Managed
    • Alternatives
    • ESG Rated
  • ESG
    • Latest ESG News
    • The Institutional Investor’s Guide to ESG Investing
    • ESG Sustainability - Gaining Momentum
    • Climate Change: The Inescapable Opportunity
    • Impact Investing
    • 2022 ESG Investing Conference
    • ESG Rated ETFs
  • Defined Contribution
    • Latest DC News
    • DC Money Manager Rankings
    • DC Record Keeper Rankings
    • Innovations in DC
    • Trends in DC: Focus on Retirement Income
    • 2022 Defined Contribution East Conference
    • 2022 DC Investment Lineup Conference
  • Searches & Hires
    • Latest Searches & Hires News
    • Searches & Hires Database
    • RFPs
  • Performance Data
    • P&I Research Center
    • Earnings Tracker
    • Endowment Returns Tracker
    • Corporate Pension Contribution Tracker
    • Pension Fund Returns Tracker
    • Pension Risk Transfer Database
    • Future of Investments Research Series
    • Charts & Infographics
    • Polls
  • Careers
  • Events
    • View All Conferences
    • View All Webinars
    • 2022 Retirement Income Conference
    • 2022 Managing Pension Risk & Liabilities
    • 2022 WorldPensionSummit
Breadcrumb
  1. Home
  2. REGULATION AND LEGISLATION
December 26, 2016 12:00 AM

Retirement reforms seen on back burner

Industry issues not a priority of ambitious Trump agenda

Hazel Bradford
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print
    Brian Graff called the absence of any significant talk about retirement issues a problem.

    With President-elect Donald Trump promising to spend his first 100 days in office pushing an ambitious agenda that includes tax and regulatory reform — and above all, economic growth — retirement issues don't have much of a chance of being noticed, at least in a good way.

    “They are not talking about retirement at all. That's the problem,” said Brian Graff, CEO of the American Retirement Association in Arlington, Va., at a Dec. 15 retirement policy conference held by the Employee Benefit Research Institute in Washington. “We're viewed as this big, attractive piggy bank that they can use for their priorities, and it's because we are not the priority. It's the fundamental indifference about retirement that is our biggest challenge.”

    Mr. Trump and congressional Republicans who will be leading the tax reform effort want to stimulate economic growth by simplifying the tax code and lowering rates. To offset the revenue loss, they will have to find money somewhere else. That puts the two biggest tax deductions, health care and retirement savings, at risk of at least partial trimming, either through less generous deductions or limits for higher-paid workers.

    “There's a potential threat,” said Geoff Manville, principal, government relations, at Mercer LLC in Washington. ”We've seen a number of proposals put forth. Some would reduce the types of plans (eligible for deductions) for simplicity and portability, similar to health care, to level the tax advantage playing field across the entire employer/non-employer space.”

    He and others are hopeful that in the hunt for revenue, the recent trend of raising premiums paid to the Pension Benefit Guaranty Corp. will be reversed by legislation backed by Senate Budget Committee Chairman Michael Enzi, R-Wyo., to take PBGC premiums out of the federal budget process and keep more plan sponsors from leaving the defined benefit system.

    Republican control of Congress and the White House could also revive a package of retirement savings reforms passed by the Senate Finance Committee in September that would, among other things, allow employers to access open multiple-employer plans, make it easier for them to offer annuities, expand access to 401(k) plans to some part-time workers, and offer startup and automatic-enrollment tax credits for small businesses. The multiple-employer plan model “could do a lot to expand coverage and could transform the industry,” said Mr. Manville.

    The Senate Finance package also tried unsuccessfully to address severe underfunding of the $4.4 billion United Mine Workers of America 1974 Pension Plan, Washington. That plan plus several other large struggling multiemployer plans expected to overwhelm a struggling PBGC could provide an unexpected challenge to the Trump administration, which might have to support benefit cuts or new funding sources.

    Potential opportunity

    Mr. Trump's call for regulatory reform could present an opportunity for plan sponsors, said Alan Glickstein, senior retirement consultant at Towers Watson in Dallas. “He wants to get rid of two regulations for every one new one. I think it is a great chance for plan sponsors to think about what are the most prevalent ones that we want to get rid of, or at least make less onerous. There may be some fresh opportunities to prioritize some of the regulations that add a burden to plan sponsors.”

    The Department of Labor's fiduciary rule, scheduled to go into effect in April, is at the top of the regulatory reform agenda, but a delay is considered more likely than quick repeal. “I don't know how successful they're going to be in repealing the regulation, but I think there will be a significant lack of interest in pursuing it,” said Nancy Ross, a Chicago-based partner at law firm Mayer Brown who thinks that “Obama's pro-labor agenda was one of the most aggressive that I've ever lived through in my practice.”

    Mr. Glickstein agrees that it will be a while before the timing on a fiduciary rule repeal becomes clear. “I am expecting change, but not as much, and not as quick as some people might think.”

    Another Trump priority is revisiting the Dodd-Frank Wall Street Reform and Consumer Protection Act to see how much can be undone. Incoming Treasury Secretary Steven Mnuchin, a former Goldman Sachs and hedge fund executive, has pledged to undo the parts that impede lending and curb economic growth. Reform could also happen at the regulatory level by changing leaders and priorities at the Securities and Exchange Commission and other agencies. Jim Allen, head of capital markets policy for the CFA Institute in Charlottesville, Va., expects incoming SEC officials to consider having third parties examine investment advisers, and to scrutinize where various rules on disclosure overlap.

    A likely vehicle for starting the Dodd-Frank reform conversation is the Financial Choice Act bill that is expected to be reintroduced in January by House Financial Services Committee Chairman Jeb Hensarling, R-Texas. It would repeal the Volcker rule, end taxpayer-funded bailouts and the concept of “too big to fail”; and retroactively repeal the Financial Stability Oversight Council's authority to designate firms as systemically important financial institutions. Institutional investors worry that it would also undo several corporate governance gains from Dodd-Frank.

    President-elect Trump's campaign had little to say about retirement issues, but for the congressional committees with jurisdiction over retirement and retirement tax incentives, “there's a lot a pent-up interest in doing something on retirement security,” said Mr. Manville of Mercer. “It's just a question of breaking through.”

    Auto-IRA pressure

    Pressure on Congress also is expected to come from states that are moving ahead with their own auto-IRA programs for private-sector workers. “I do think that if enough states try it, the financial services industry will go to Congress and say, "we don't want 50 different ones.' I do think that will be the largest advance,” said Joshua Gotbaum, a Brookings Institution guest scholar and member of the Commission on Maryland Retirement Security and Savings that led to that state's secure choice program, at the EBRI forum.

    Until that happens, Washington's attention span, particular in the White House, is not expected to last long enough to study more sweeping approaches to retirement coverage like those promoted in 2016 by several influential policymakers and finance executives, including the Blackstone Group's Hamilton “Tony” James, The New School's Teresa Ghilarducci, State Street Global Advisors' Ronald P. O'Hanley, retired U.S. Sen. Thomas R. Harkin, and the Bipartisan Policy Center.

    The proposals include guaranteed retirement accounts for all workers that would be managed by professional money managers, more accessible multiple employer retirement plans and tax incentives to increase automatic enrollment, escalation and small business participation. n

    Related Articles
    Volatility concerns will keep vexing managers
    Upcoming elections shoving political risk to center stage
    Uncertainty of regulations the only certainty in 2017
    Outlook 2017
    Most state pension funds made benefit cuts in years following financial crisis …
    Corporate pension funding ends 2016 slightly down for the year, report says
    Center for State and Local Government Excellence taps new president/CEO
    PBGC seeks input on multiemployer withdrawal liability options
    Big players pan modifications to DOL's Form 5500
    SEC sets marketwide risks, money market funds and cybersecurity as top examinat…
    DOL releases 2nd guidance on fiduciary rule
    Resolutions introduced in Senate to undo 'Secure Choice' rules
    New insight into Americans' financial capability
    Trump's budget raises PBGC multiemployer premiums, hits federal employee benefi…
    Recommended for You
    Standards-of-conduct rules approved along party lines
    Standards-of-conduct rules approved along party lines
    Investors hail SEC guidelines on exchanges
    Investors hail SEC guidelines on exchanges
    U.K. regulator watching manager over Woodford fund freeze
    U.K. regulator watching manager over Woodford fund freeze
    New SEC Rule on Fair Pricing Determination Needs Careful Consideration
    Sponsored Content: New SEC Rule on Fair Pricing Determination Needs Careful Consideration

    Reader Poll

    June 6, 2022
    SEE MORE POLLS >
    Sponsored
    White Papers
    Nearing the finish line: Ideas on end-state investing for corporate DB plans
    The Meaning of "Portfolio Intelligence"
    Credit Indices: Closing the Fixed Income Evolutionary Gap
    Forever in Style: Benchmarking with the Morningstar® Broad Style Indexes℠
    Crossroads: Politics, Inflation, & Bonds
    Is there a mid-cap gap in your DC plan?
    View More
    Sponsored Content
    Partner Content
    The Industrialization of ESG Investment
    For institutional investors, ETFs can make meeting liquidity needs easier
    Gold: the most effective commodity investment
    2021 Investment Outlook | Investing Beyond the Pandemic: A Reset for Portfolios
    Ten ways retirement plan professionals add value to plan sponsors
    Gold: an efficient hedge
    View More
    E-MAIL NEWSLETTERS

    Sign up and get the best of News delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    Subscribe Today
    June 20, 2022 page one

    Get access to the news, research and analysis of events affecting the retirement and institutional money management businesses from a worldwide network of reporters and editors.

    Subscribe
    Connect With Us
    • RSS
    • Twitter
    • Facebook
    • LinkedIn

    Our Mission

    To consistently deliver news, research and analysis to the executives who manage the flow of funds in the institutional investment market.

    About Us

    Main Office
    685 Third Avenue
    Tenth Floor
    New York, NY 10017-4036

    Chicago Office
    130 E. Randolph St.
    Suite 3200
    Chicago, IL 60601

    Contact Us

    Careers at Crain

    About Pensions & Investments

     

    Advertising
    • Media Kit
    • P&I Content Solutions
    • P&I Careers | Post a Job
    • Reprints & Permissions
    Resources
    • Subscribe
    • Newsletters
    • FAQ
    • P&I Research Center
    • Site map
    • Staff Directory
    Legal
    • Privacy Policy
    • Terms and Conditions
    • Privacy Request
    Pensions & Investments
    Copyright © 1996-2022. Crain Communications, Inc. All Rights Reserved.
    • Topics
      • Alternatives
      • Consultants
      • Coronavirus
      • Courts
      • Defined Contribution
      • ESG
      • ETFs
      • Hedge Funds
      • Industry Voices
      • Investing
      • Money Management
      • Opinion
      • Partner Content
      • Pension Funds
      • Private Equity
      • Real Estate
      • Russia-Ukraine War
      • SECURE Act 2.0
      • Special Reports
      • White Papers
    • Rankings & Awards
      • 1,000 Largest Retirement Plans
      • Top-Performing Managers
      • Largest Money Managers
      • DC Money Managers
      • DC Record Keepers
      • Largest Hedge Fund Managers
      • World's Largest Retirement Funds
      • Best Places to Work in Money Management
      • Excellence & Innovation Awards
      • WPS Innovation Awards
      • Eddy Awards
    • ETFs
      • Latest ETF News
      • Fund Screener
      • Education Center
      • Equities
      • Fixed Income
      • Commodities
      • Actively Managed
      • Alternatives
      • ESG Rated
    • ESG
      • Latest ESG News
      • The Institutional Investor’s Guide to ESG Investing
      • ESG Sustainability - Gaining Momentum
      • Climate Change: The Inescapable Opportunity
      • Impact Investing
      • 2022 ESG Investing Conference
      • ESG Rated ETFs
    • Defined Contribution
      • Latest DC News
      • DC Money Manager Rankings
      • DC Record Keeper Rankings
      • Innovations in DC
      • Trends in DC: Focus on Retirement Income
      • 2022 Defined Contribution East Conference
      • 2022 DC Investment Lineup Conference
    • Searches & Hires
      • Latest Searches & Hires News
      • Searches & Hires Database
      • RFPs
    • Performance Data
      • P&I Research Center
      • Earnings Tracker
      • Endowment Returns Tracker
      • Corporate Pension Contribution Tracker
      • Pension Fund Returns Tracker
      • Pension Risk Transfer Database
      • Future of Investments Research Series
      • Charts & Infographics
      • Polls
    • Careers
    • Events
      • View All Conferences
      • View All Webinars
      • 2022 Retirement Income Conference
      • 2022 Managing Pension Risk & Liabilities
      • 2022 WorldPensionSummit