Recently, TRA’s John Markley was in Washington DC attending ARA (American Retirement Association) and ASPPA GAC (Government Affairs Committee) Meetings in DC – June 8 to June 11, 2019.
Below is a summary of what he learned:
ASPPA has a great relationship with governmental agencies and with Senators and representatives and their staff and these meetings showed the benefit of the relationships. ASPPA is thrilled with the passage of the SECURE Act by the House 417-3. Now, onto the Senate. McConnell has announced the remainder of discussion time for the year will be for nominees and no bills can come to the floor for discussion. So, the only way to get the SECURE Act to a vote is to have unanimous consent. This would mean that the SECURE Act could not be changed at all for the vote. The Senate had their version, RESA, but the changes to their version could not happen by this method. At this time, only 2 senators might object, Toomey from PA and Cruz from Texas. Toomey does not like the provision for eliminating 401(k) loans by credit cards. Cruz wants 529 tax benefits in the bill (like it was in the Senate version, not related to Pensions). ASPPA is meeting with both to determine if some alternative can be explored.
Problems with the Secure Act – Which can be resolved in subsequent legislation, but here goes:
- For retirement plan geeks, it does not have a remedial amendment period. The Pension protection Act had a 3 year remedial amendment period. So, in theory, if it passed December 28, the Plans would be out of compliance on the first day of the New Year. Don’t tell Linda W!
- For MEPS, there is no 403(b) MEPS.
Lots more going on!
- Student Loans – as you may be aware, the IRS has issued a Private Letter Ruling allowing an employer to give a 401(k) match on student loan payments. ASPPA sees problems with 401(k) tests if this were explicitly allowed
- State Plan Initiatives – From the description, New jersey and Oregon are the furthest along in requiring employers of a certain size to have a Plan or adopt the state wide Plan. So, why adopt a good 401(k) Plan instead of the state Plan?
- Portman- Cardin Act – Quick Summary is that if there is a democratic waive in 2020, all employers of a specifed size may be required to have a Plan.
- “Wall Street” Tax – This has been proposed before, but the concept is a 10 basis point charge on any financial transaction. The most recent version does not have retirement plans exempted! It would add an estimated 31 basis points of expense to a 401(k) plan! ASPPA obviously against this!
- LIDA – Lifetime Income Disclosure – Because some many vendors already have apps, this is not needed per ASPPA.
- Electronic Disclosure – Progress being made here! The Federal Defined Contribution Plan, Social Security and others already have it, why not qualified retirement Plans? In fact the DOL is to issue a statement on this by September of this year, rumor has it that this will be out any day now.