SEC Commissioner Kara Stein wants President Donald Trump to issue an executive order to create a working group on retirement security, she said Tuesday at the Brookings Institution in Washington.
Ms. Stein, one of two Democrats on the five-member commission, said the country's retirement issue is complex and the Securities and Exchange Commission's mandate doesn't allow it to address the entire matter. Her vision for the working group assembles regulators from the departments of Labor, Treasury, Commerce and others. Additionally, market participants like money managers, exchanges and broker-dealers, would be included to determine private-sector solutions wherever possible, she said.
"The purposes and functions of the group would be to enhance the state of retirement security in the United States," Ms. Stein added. "The chairperson of the working group could be the chair of the SEC with a report due to the president within 60 days expressing views on recommended legislative, regulatory or other changes."
Mr. Trump has expressed interest on retirement issues. In August, he issued an executive order directing administration officials to expand retirement savings options by revisiting rules on open multiple employer plans and minimum distributions.
The White House could not immediately be reached for comment on Ms. Stein's proposal.
James A. Klein, president of the American Benefits Council in Washington, said the more government officials who focus on retirement, the better. But the 60 days Ms. Stein suggested for a report to be issued is likely insufficient, he added. "It probably will require more time as well as casting the net wider in terms of the stakeholders who need to participate in this effort," Mr. Klein said.
At an agency level, Ms. Stein said the SEC should enhance investor education and provide incentives for savers to invest in the first place.
"Should employers receive tax incentives to increase savings and participation by their employees?" she asked. "If 75% of a firm's employees contribute an average of 5% to plans, should the employer receive a special tax rebate? Should individuals be allowed to deduct the cost of retirement advice? Should there be tax exemptions for pension refinancing bonds, similar to municipal bonds? These are but a few ideas on how to use public policy to incentivize saving and investing."
Ms. Stein's term ends in December and her replacement has yet to be nominated. When asked when the commission might vote on its best-interest standard proposal, which would compel brokers to put clients' financial interests ahead of their own and requires them to mitigate financial conflicts, Ms. Stein said she didn't have any information to share. During her speech, though, she said there are two ways to ensure investors get the best advice from financial professionals.
"We can raise the duty for all investment professionals so that it meets investor expectations. Or, we can teach investors to treat the advice that they receive from certain professionals differently."
Later in the speech, she added: "My guess is that it would be easier to simply require that all persons actually giving investment advice put their client's interest first. It's simple and straightforward."
The comment period for the SEC's standard of conduct package, which includes the best-interest proposal, ended Aug. 7. The SEC received more than 6,000 comments.