Washington. Regulation. Litigation.
Attendees at the Plan Sponsor Council of America's annual conference learned last week what's happening and what might happen to the retirement industry in Congress, in regulatory agencies and in court — as well as what they can do without waiting for new legislation or regulation.
At the top of the list was the prospect of a broad tax proposal offered by President Donald Trump and the anticipated response by Congress to craft a detailed version of tax reform which, PSCA officials hope, will retain tax benefits that encourage retirement savings.
“We are doing everything we can to educate lawmakers in Washington,” Kenneth Raskin, the newly elected chairman of the PSCA board, said during a May 2 news conference at the PSCA's conference, held in Chicago.
“We hope there won't be a fight,” said Mr. Raskin. “Right now, there isn't.” He was referring to a tax proposal from Mr. Trump that appears to retain deductions for retirement savings, home ownership and charitable donations, while eliminating other deductions.
Given the potential complexity of tax reform, “We want to be prepared,” Mr. Raskin added.
PSCA is a founding member of the Save Our Savings Coalition, created in early April by prominent retirement industry members including the American Benefits Council, Defined Contribution Institutional Investment Association and Employee Benefit Research Institute, to explain to legislators how tax benefits promote retirement savings.
Having “more than one voice is more effective” in efforts to protect retirement plans during debates about taxation and regulation, said Mr. Raskin, a New York-based partner in the King & Spalding law firm and chairman of the firm's employee benefits and executive compensation practice.
“Everybody is optimistic but cautious about protecting” the retirement industry's tax benefits, said David Levine, a principal at the Groom Law Group, which is PSCA's Washington lobbyist as well as an adviser to the Save Our Savings Coalition.
Mr. Raskin said PSCA didn't have immediate concerns about the Labor Department's recent decision to delay by 60 days the implementation of the fiduciary rule.
“I don't see any harm” giving sponsors a few more months to better study the potential impact of the rule, now scheduled to take effect June 9 instead of April 10, Mr. Raskin said.
Because different service providers are “going down different roads” in deciding how to offer services based on the fiduciary rule — distinguishing between fiduciary advice and non-fiduciary information — “sponsors are caught in the middle,” said Mr. Levine.
Several PSCA executives agreed that whatever the final form of the rule, the prolonged process has given sponsors an opportunity to better study service providers' contracts.