Retirement legislation chances brighten
Skip to main content
pilogo-NEW
Subscribe
  • Subscribe
  • My Account
  • login
  • NEWS
    • Asset owners and the coronavirus
    • Alternatives
    • Consultants
    • Coronavirus
    • Defined Contribution
    • ESG
    • Frontlines
    • Hedge Funds
    • Investing / Portfolio Strategies
    • Money Management
    • Pension Funds
    • People Moves
    • Private Equity
    • Real Estate
    • Searches & Hires News
    • SECURE Act
    • Special Reports
    • WorldPensionSummit
    • Ron Schmitz
      Pandemic drives faster transition for Virginia to private markets
      Mubadala Investment Co. logo
      Mubadala draws on portfolio in coronavirus fight
      T.J. Carlson
      Texas Muni reduces downside risk during pandemic, finding opportunities now
      Scott Davis
      ‘Triage plan’ at Indiana system helped stem losses
    • BentallGreenOak agrees to acquire Metropolitan Real Estate Equity
      watch video
      0:45
      Private funds weathered 2020 turmoil
      Daniel McHugh
      Aviva Investors promotes from within for real assets CIO
      Marc Rowan
      More alts managers seek expansion to retail market
    • Kieran Mistry
      Hymans Robertson picks head for new non-traditional risk transfer unit
      Troy Saharic
      NEPC brings on director of new business development
      Bill Foley
      Foley-backed SPAC agrees to $7.3 billion deal with Alight
      Jason Schwarz, chief operating officer of Wilshire,
      New owners have big plans for future of Wilshire
    • Bain: Private equity managers finish 2020 strong
      Eastern Colorado VA Receives Shipments Of Covid-19 Vaccines
      Fidelity looks to speed vaccinations to get workers back to offices
      OMERS CEO Blake Hutcheson
      OMERS records worst loss since 2008 on bad COVID-19 bets
      Mitchells & Butlers turns off tap on pension contributions until April
    • A  Malaysia flag flies in Putrajaya on Sept. 23, 2020
      Malaysia’s EPF ends 2020 up 7.9% at almost $250 billion
      Database’s debut focuses on public-sector DC plans
      DC plan sponsors differ on need for annuities – survey
      Biden’s retirement idea getting the cold shoulder
    • Emissions from a smokestack in Poland
      Asset managers facing more scrutiny on ESG issues – report
      Boris Johnson, U.K. prime minister, hosts the U.N. Security Council's virtual meeting on climate change risks in London on Feb. 23, 2021
      Progress in fighting climate change falls short – U.N.
      Justin Trudeau, Canada's prime minister, smiles during a virtual joint news conference with U.S. President Joe Biden in Ottawa on Feb. 23, 2021
      U.S. joins forces with Canada on climate change
      Signage is displayed at Harvard University Health Services in Cambridge, Mass., on April 20, 2020
      Harvard endowment’s fossil-fuel investments drop to 2% of assets
    • 2 U.K. pension execs take on ESG investing in new podcast
      Donation illustration
      Jefferies will use trading commissions to do good
      Michael Arougheti
      SPACs ride wave as latest investment darling
      Spirit winners
      Prudential honors young people who are helping out
    • Robert 'Rob' Shafir listens during a Senate Permanent Subcommittee on Investigations hearing in Washington on Feb. 26, 2014
      Sculptor hedge fund hits sixth straight year of outflows
      The WallStreetBets forum on the Reddit Inc. website on a laptop computer and the GameStop logo on a smartphone in an arranged photo.
      GameStop frenzy has hedge fund managers rethinking next moves
      Gabe Plotkin, chief investment officer and portfolio manager of Melvin Capital Management, speaks during the Sohn Investment Conference in New York on May 6, 2019
      Citadel, Point72 back Melvin with $2.75 billion after losses
      Shanghai skyline
      Global hedge funds struggle even in a more open China market
    • Bain: Private equity managers finish 2020 strong
      Metlife Investment Management selects new head of real estate equity
      Servant-Rainsford combo
      Generali Group picks CEOs for money management businesses
      Abu Dhabi is biggest employer of wealth fund executives
    • Metlife Investment Management selects new head of real estate equity
      Goldman Sachs co-head of asset management to retire
      Eastern Colorado VA Receives Shipments Of Covid-19 Vaccines
      Fidelity looks to speed vaccinations to get workers back to offices
      Servant-Rainsford combo
      Generali Group picks CEOs for money management businesses
    • A  copy of the Daily Mirror newspaper is removed from the production line at Trinity Mirror's factory in Watford, U.K., on April 13, 2010
      Media group Reach inks buy-in deal for pension fund
      Illinois Teachers preliminary returns falls short of benchmark
      Thomas Spencer
      Oklahoma Teachers chief Tom Spencer to retire
      Swedish flags fly from a tourist souvenir shop in Gamla Stan in Stockholm on March 26, 2020
      Sweden’s AP1 gains 9.7% in 2020
    • Metlife Investment Management selects new head of real estate equity
      Goldman Sachs co-head of asset management to retire
      Servant-Rainsford combo
      Generali Group picks CEOs for money management businesses
      K. Niles Bryant
      Bowdoin College names new CIO
    • Bain: Private equity managers finish 2020 strong
      Carlyle secures $4.1 billion ESG-related credit facility
      Hamilton Lane raises $3.9 billion for fifth secondary fund
      PSG closes first Europe-focused fund at $1.5 billion
    • AEW chooses head of fund operations and debt finance
      Sebastiano Ferrante and Jocelyn de Verdelon
      PGIM Real Estate turns to staff to fill new roles
      European managers key in on specialist strategies
      Ingrid Jacobs
      Jones Lang LaSalle brings on head of diversity and inclusion
    • Retirement cartoon
      Hopes rising for retirement readiness in 2021
      Neal and Brady
      Retirement security could be only issue both sides accept
      David Ireland
      Sponsors returning to questions about in-plan annuities
      Shawn O'Brien
      Annuities coming to target-date funds, but not right away
    • Charging Bull, sometimes referred to as the Wall Street Bull or the Bowling Green Bull, a bronze sculpture that stands on Broadway just north of Bowling Green in the Financial District of New York City
      Top-performing managers Q4 2020
      P&I 1,000 largest retirement plans: 2021
      Retirement in emerging markets
      Outlook 2021
    • U.S. still a key market for investors
      Collected coverage of P&I's 2020 WorldPensionSummit
      Pedestrians pass a large advertisement on the Arndale Center shopping mall reading 'Act now to avoid a local lockdown' in Manchester, England
      COVID-19 puts new opportunities and risks on the agenda - WPS panelists
      Screens display stock price information over the trading floor of the NYSE Euronext exchange in Paris
      Private assets will continue to grow in portfolios – WPS panelists
  • Data
    • Research Center
    • Searches & Hires Database
    • Searches & Hires News
    • RFPs
    • Charts / Infographics
    • Sponsored Research
    • Trackers
    • Q2 2020 searches and hires overview report
      Q2 2020 money manager M&A activity summary
      Q2 2020 legal overview report
      Q1 2020 searches and hires overview report
    • Los Angeles Fire & Police slates $80 million for real estate, private equity
      Chicago Water scouring for global equity manager
      New York Deferred Comp plan preps international equity search
      Baltimore City Fire & Police commits $15 million to infrastructure fund
    • Los Angeles Fire & Police slates $80 million for real estate, private equity
      Chicago Water scouring for global equity manager
      New York Deferred Comp plan preps international equity search
      Baltimore City Fire & Police commits $15 million to infrastructure fund
    • Actuarial Services
      Emerging Market Equity Manager Services
      Securitized Credit Manager Search
      Private Placements Asset Manager Search
    • Taiwan Semiconductor’s No. 1 in the emerging markets book
      U.S. fixed-income returns post another positive year
      Nasdaq delivers an impressive year
      U.S. dollar's recent decline continues
    • Institutional Investors: Shared Expectations, Divergent Paths
      Global Investor Study 2016
      Workplace Financial Wellness
    • U.S. Endowment Returns Tracker
      Pension Fund Returns Tracker
      Earnings Tracker
      Corporate Pension Contribution Tracker
  • Insights
    • Opinion
    • White Papers
    • Industry Voices
    • Letters to the Editor
    • Partner Content
    • Publisher's Update
    • Tesla cartoon
      Don’t confuse wealth creation with retirement saving
      Top 1000 cartoon
      Top 1,000 retirement plans weather storm just fine
      Infrastructure cartoon
      You must go big on infrastructure, Mr. President
      Retirement cartoon
      Hopes rising for retirement readiness in 2021
    • Investment Trends: Looking Ahead Across Equity Sectors
      Rethinking Market and Reference Data Management
      China is embarking on a new stage of growth
      Gold Outlook 2021
    • Sameer Shalaby
      Commentary: Why should investors care about treasury management?
      David Blitzstein
      Commentary: Without a national retirement policy, Americans face a future of pension crises
      Lawrence Cunningham
      Commentary: Gensler should keep Clayton’s pragmatic proxy adviser rules
      My-Linh Ngo
      Commentary: Pension funds and the role of the debt market in the fight against climate change
    • Writer using a typewriter
      OCIO industry needs to adopt GIPS
      Writer or journalist workplace. stock illustration
      Even as it assails China, Trump administration emulates it
      Skeptical of Main Street support for proxy adviser proposal
      Focus on manager diversity pushes asset owners’ to walk the talk
    • P&I Content Solutions
      How will gold react?
      To people shaking hands
      P&I Content Solutions
      Lessons From 2020: Today’s OCIO Model Passes a Major Test of Governance
      Sponsored Content By MassMutual
      Leveraging Data to Manage Risk
      Sponsored Content By iShares
      ETFs are becoming a cornerstone of insurance equity portfolios
    • Help us help you by supporting quality journalism
      You Must Believe in Spring
      Everything Must Change
      Tomatoes & Investments
  • Multimedia
    • Videos
    • Webinars
    • Polls
    • Slideshows
    • Charts / Infographics
    • watch video
      0:45
      Private funds weathered 2020 turmoil
      watch video
      0:59
      Secure choice and other retirement plans at a state level
      watch video
      3:33
      P&I 1,000 by the numbers 2021
      watch video
      1:33
      A look at hiring activity in 2020
    • Emerging Markets: Expanding Investors’ View
      2021: A Fixed Income Odyssey
      Technology is the New Oil: The Changing Nature of Emerging Markets
      Powering the Change: The power of diversity and inclusion
    • POLL: Working after the pandemic
      POLL: The year ahead for the 1,000 largest U.S. retirement funds
      POLL: The Biden administration’s economic plans
      POLL: Retirement issues in 2021
    • view gallery
      9 photos
      Coronavirus and the markets
      view gallery
      22 photos
      The 1,000 largest retirement funds: 2020
      view gallery
      10 photos
      Outlook 2020
      view gallery
      10 photos
      2019 as seen through the eyes of Roger
    • By the Numbers for February 2021
      Top Performing Managers of Global Balanced, 4th Quarter 2020
      Top Performing Managers of Global Real Estate, 4th Quarter 2020
      Top Performing Managers of Leveraged Net Long (SA Only), 4th Quarter 2020
  • Events
    • Conferences
    • Webinars
    • Defined Contribution Spring Virtual Series
      DC Investment Lineup Virtual Series
      ESG Investing Virtual Series
      Private Markets Virtual Series
    • Emerging Markets: Expanding Investors’ View
      2021: A Fixed Income Odyssey
      Technology is the New Oil: The Changing Nature of Emerging Markets
      Powering the Change: The power of diversity and inclusion
  • Careers
  • Research Center
MENU
Breadcrumb
  1. Home
  2. WASHINGTON
August 20, 2018 01:00 AM

Retirement legislation chances brighten

Coming midterms could be catalyst for success of long-sought priorities

Hazel Bradford
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print
    Chip Somodevilla/Getty Images
    Sens. Ron Wyden, left, and Orrin Hatch reintroduced RESA in March.

    A flurry of bills introduced this session of Congress and the looming November elections are raising hopes on the prospects for expanding retirement security, Capitol Hill watchers say.

    "Elections have a way of shaking things up," said Andrew Remo, director of legislative affairs for the American Retirement Association in Arlington, Va., which represents plan sponsors, service providers and other retirement professionals.

    "It has been 12 years since Congress has done a comprehensive retirement bill, so there's a lot of pent up demand," Mr. Remo said.

    Barbara Van Zomeren, St. Cloud, Minn.-based senior vice president of the ERISA team at third-party administrator Ascensus LLC, agreed. "It seems ripe for something to happen. I think retirement is more of an issue than it has been in the past," she said.

    Hopes for action on retirement issues were first raised in March, when Senate Finance Committee Chairman Orrin Hatch, R-Utah, and ranking member Ron Wyden, D-Ore., reintroduced the Retirement Enhancement and Savings Act, which the committee had already passed unanimously in the previous session of Congress. (The session ended before floor votes could be scheduled.)

    A House counterpart bill was introduced March 15 by Rep. Ron Kind, D-Wis., and Mike Kelly, R-Pa.

    Among other provisions, RESA would make it easier for smaller employers to join open multiple employer plans, ease non-discrimination testing rules for plan sponsors, lift a 10% safe-harbor cap on default contributions for automatic enrollment and auto escalation in defined contribution plans, and give cooperatives and small-employer charities smaller Pension Benefit Guaranty Corp. premiums.

    While these ideas enjoy bipartisan support, more controversial provisions include annual "lifetime income" disclosure by plan sponsors to show participants the annuity value of their defined contribution accounts, and a ban on "stretching out" defined contribution and individual retirement account payments to non-spouse beneficiaries of larger accounts beyond five years.

    Still more

    Other retirement proposals introduced this Congress include several sponsored by longtime retirement advocate Richard Neal, D-Mass., the ranking member of the House Ways and Means Committee. One proposal would require many employers to offer a 401(k) or 403(b) plan or incur an excise tax. It, too, would make it easier for small businesses to use multiple employer plans, and expand automatic enrollment and escalation features. It also calls for use of target-date funds or other qualified default investment alternatives, with at least 50% of vested accounts having a lifetime income component. A second bill would modify the current auto-enrollment safe-harbor cap of 10% of pay and establish a new safe harbor to get employers to contribute more.

    Those concepts "are taken seriously by the retirement community. Many people think that mandates would be the only way to move forward," said Geoff Manville, principal, government relations, at Mercer LLC in Washington. If Democrats take control of the House by winning a majority in the mid-term elections in November, those ideas are certain to get traction, he and others noted.

    Another package introduced by a bipartisan group of senators in July mirrors RESA's provisions for pooled employer plans and incentives to increase auto enrollment and auto escalation. It also calls for short-term savings accounts to help with financial emergencies and allowing part of tax refunds to go into "rainy-day" savings accounts.

    A more modest proposal from Sens. Rob Portman, R-Ohio, and Ben Cardin, D-Md., included in an Internal Revenue Service reform measure, would let plan sponsors self-correct "inadvertent" errors instead of going through the more expensive voluntary compliance program.

    Even the occasionally raised idea of creating a private-sector version of the $553.8 billion Thrift Savings Plan, Washington, reappeared in the 115th session of Congress in a bill introduced by Sen. Jeff Merkley, D-Ore., to give workers without workplace access to a retirement savings plan — the American Savings Account — with low-fee investment options similar to those offered in the TSP.

    Pulling in tax reform

    Things got even more interesting in July. House Ways and Means Committee Chairman Kevin Brady announced plans to include RESA provisions in "Tax Reform 2.0" legislation aimed at making permanent the tax-rate cuts for individuals and pass-through businesses that 2017's contentious tax reform process only allowed to be temporary until 2026, because of the lost revenue. While the Texas Republican has not offered details, he also floated the idea of universal savings accounts, similar to Roth accounts but with fewer limits on withdrawals; allowing 529 education accounts to be used to pay student debt; and allowing people to access retirement accounts without penalty for expenses related to childbirth or adoption.

    The retirement ideas, said Mr. Brady when he announced them, would have bipartisan appeal, but using them to pass another round of tax reform did not sit well with RESA co-sponsor Mr. Hatch, who is retiring in December. "(Mr. Hatch) does not want to lose the legislation to a misguided partisan effort at political point-scoring," a Senate Finance Committee staffer said in an email to Ways and Means staff and others.

    The best bet

    Given that state of politics, some retirement advocates think the most likely idea to get passed this year will be creating open multiple employer plans. "If there's any type of law that can actually be passed in this politically charged environment, it's one that deals with this idea," said Steven Friedman, shareholder at Littler Mendelson PC, New York, a law firm specializing in labor management issues advising clients on retirement benefit plans. "I think that for small employers, who for one reason or another don't want to go through the headaches and expense of establishing a plan, there could be real benefits. Employers would love the economies of scale and I think the service providers would love to do something like this," Mr. Friedman said.

    Legislation allowing for open MEPs "is low-hanging fruit. There is no reason not to do it," said BlackRock Inc. co-Chairwoman Barbara Novick, New York. "Whether RESA is the one that moves, or other ones, there are opportunities. There are quite a few things that could come to fruition," said Ms. Novick, who leads the firm's government relations and public policy efforts. "If we could at a very minimum increase access to retirement savings, that would be a major improvement, and probably the most important is automatic enrollment."

    Lynn Dudley, senior vice president for global retirement and compensation policy at the American Benefits Council in Washington, said lawmakers also are sensitive to plan sponsors' needs to address non-discrimination testing rules without delay. "We have many, many plans where hundreds of thousands of people could lose benefits this year. I don't think that's something that (members of Congress) take lightly, and companies are speaking up," she said.

    Mr. Manville of Mercer thinks if anything gets done this year, "it will be some combination of all of the above. We have a growing list of bills building up behind the dam. September will be a crucial month."

    November will be, too. In addition to midterm elections, the Joint Select Committee on Multiemployer Pensions, which Mr. Hatch co-chairs, is working toward a November deadline to come up with solutions for struggling plans, "there is the potential for momentum on retirement generally if that committee comes out with something," said Dominic DeMatties, a partner in the Washington law firm Alston & Bird LLP and a former federal benefits tax counsel. "There's no doubt in my mind that there are people on both sides of the aisle who are interested in moving some of these provisions."

    Related Articles
    Retirement savings proposals introduced in Senate, under discussion in the House
    Senate RESA backers resist bundling with House plan for 'Tax Reform 2.0'
    Commentary: Getting retirement solutions rights is a matter of national security
    Transamerica survey shows several disconnects between employers, employees on r…
    Recommended for You
    U.S. rejoins Paris climate agreement
    U.S. rejoins Paris climate agreement
    GameStop saga brings congressional scrutiny of short selling, execution
    GameStop saga brings congressional scrutiny of short selling, execution
    Walsh to revisit Trump-era ESG, proxy voting rules
    Walsh to revisit Trump-era ESG, proxy voting rules
    How will gold react?
    Sponsored Content: How will gold react?
    sponsored
    Events
     
     
    Sponsored
    White Papers
    Rethinking Market and Reference Data Management
    Investment Trends: Looking Ahead Across Equity Sectors
    China is embarking on a new stage of growth
    Gold Outlook 2021
    Shifting DC Times - Winter 2021
    GP-LED OPPORTUNITIES AT THE SMALLER END OF THE MARKET
    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

    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.

    pilogo-NEW
    About Us

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

    Chicago Office
    150 N. Michigan Ave.
    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 © 1996-2021. Crain Communications, Inc. All Rights Reserved.
    • NEWS
      • Asset owners and the coronavirus
      • Alternatives
      • Consultants
      • Coronavirus
      • Defined Contribution
      • ESG
      • Frontlines
      • Hedge Funds
      • Investing / Portfolio Strategies
      • Money Management
      • Pension Funds
      • People Moves
      • Private Equity
      • Real Estate
      • Searches & Hires News
      • SECURE Act
      • Special Reports
      • WorldPensionSummit
    • Data
      • Research Center
      • Searches & Hires Database
      • Searches & Hires News
      • RFPs
      • Charts / Infographics
      • Sponsored Research
      • Trackers
    • Insights
      • Opinion
      • White Papers
      • Industry Voices
      • Letters to the Editor
      • Partner Content
      • Publisher's Update
    • Multimedia
      • Videos
      • Webinars
      • Polls
      • Slideshows
      • Charts / Infographics
    • Events
      • Conferences
      • Webinars
    • Careers
    • Research Center