On the regulatory front, agencies including the Securities and Exchange Commission are racing the clock to complete priorities in the event of leadership changes in the White House or Congress, where power is currently split between a Democratic House and Republican Senate. For the SEC, those include expanding access to private markets and reforming shareholder and proxy adviser rules, concepts that have met considerable resistance from market watchdogs and investor groups like the Council of Institutional Investors in Washington. While not exactly expected this year, they are priorities of outgoing Chairman Jay Clayton, who was nominated to take over as the U.S. attorney for the Southern District of New York.
The Department of Labor has been particularly active in recent weeks, finalizing and proposing regulations with major impacts on the retirement community.
In late May, it finalized a rule that permits default electronic delivery of retirement plan disclosures. In June, it took four major actions. One was an information letter giving defined contribution plan sponsors the ability to include certain private equity strategies into diversified investment options while complying with ERISA, while another was a request for information on a prohibited transaction exemption to give fiduciaries of pooled employer plans and other multiple employer plans more latitude with ERISA. It also proposed a rule stipulating that ERISA plan fiduciaries cannot invest in ESG vehicles that sacrifice investment returns or take on additional risk, and unveiled a prohibited transaction exemption to permit investment advice fiduciaries to receive compensation for their advice.
Implementing and finalizing these rules and guidelines will keep the department quite busy for the rest of the year.
The flurry of activity "is pretty typical of an administration in its last year, really trying to get a lot of guidance out before a possible change in administration," Ms. Kahn said.
Any regulations not in effect when a new administration takes over in January will likely be halted or scrapped entirely, Mr. Levine said. "If any of these items that are proposed by the Trump administration are not finalized, I would certainly expect a Democratic administration to press pause and take a look," he said.
Even with all that activity, the Labor Department could still do more, like issuing guidance on the pooled employer plan registration process. PEPs were established in the SECURE Act to make it easier for employers in unrelated businesses to join so-called open multiple employer plans and go live Jan. 1. A PEP must have a pooled plan provider designated as a named fiduciary, plan administrator and the person responsible for specified administrative duties.
According to its spring 2020 regulatory agenda, the Labor Department is also planning to propose a "deregulatory action" on proxy voting that would "modernize fiduciary practices related to the voting rights associated with ERISA plan investments and harmonize those regulations with the requirements of other regulators."
Getting final consensus on any controversial proposal like that in this unusual year would be quite a feat. In May, Preston Rutledge stepped down as assistant secretary of labor for the Employee Benefits Security Administration. Jeanne Klinefelter Wilson is serving as the acting assistant secretary and could remain in that role for the foreseeable future.
"Recognizing we're in an election year and there's a lot of focus on a lot of things, it wouldn't surprise me if Jeanne stays in that role," Mr. Levine said. "But the administration could pop up and (nominate) someone, we just don't know."