Retirement policy improvements capitol building

Retirement policy improvements may soon emerge from Washington

Edmund F. Murphy III

Ten days ago, we saw the conclusion of a tumultuous presidential election that many Americans will be happy to leave in history’s dustbin. Much has been written about the lost civility in our politics — and the relative lack of substance around which the election was framed.

Despite the fact that retirement policy was never a central theme of discussion in this election, significant opportunities are emerging that could be beneficial to the business climate in general and the defined contribution system in particular.

And that is a great thing for the millions of Americans who are seeking a better shot at a secure retirement.

This became abundantly clear this week in Washington, D.C., as Empower Retirement hosted a series of meetings with legislators, regulators, retirement plan sponsors and advisors. The purpose of these discussions — which were scheduled well in advance of the election — was to consider the election’s implications and share thoughts and perspectives about the current state of play with regard to  retirement policy. And we heard an earful!

It’s clear that attendees consider any discussion around growing the U.S. economy, or reconsidering existing tax rates, as healthy for the business climate in our country. Perhaps the recent trends in the equities markets are showing that this sentiment is widely held.

In addition, attendees were encouraged by measures recently taken up by Congress regarding lifetime income options and increasing access to retirement savings.

The Senate Committee on Finance is considering a number of common-sense reforms that enjoy broad bipartisan support.

We believe these issues are the most important and among the most under-recognized policy issues of our time. President-elect Trump now has a chance to meet this challenge on a bipartisan basis and help spur stronger economic growth in the process.

Reevaluating regulations

We are optimistic about potentially seeing a reduced regulatory burden. We’re in an environment where regulators are leveraging their influence like never before to try and shape the way our industry functions.

While no one would suggest that a reevaluation of old rules isn’t necessary — especially in light of changing technologies — it should be done in a manner that avoids disruptions to important services.

In particular, there’s been a lot of speculation in the last two weeks about the future of the DOL fiduciary rule.

As I told the Wall Street Journal after the election, Empower’s posture for now is to continue to implement the changes we need to make in order to comply with the rule.

However, if an opportunity arises to reexamine the rule, we will be happy to share our perspective.

Coming together

At Empower, we believe retirement policy issues need to come to the forefront. Every American, to some degree, is impacted by retirement security.

The defined contribution industry has garnered the trust of some 90 million Americans1 — 58% of households — and holds some $6.7 trillion in workplace savings assets. 2

Working Americans routinely cite concern about their retirement future as their single greatest worry. Millions of Americans do not have access to a retirement savings plan at work. Closing this access gap must be a priority.

Our research shows having access to a workplace plan is a critical starting point.3

The cost of healthcare in retirement continues to be a challenge both for near-retirees and those advisors who serve them. Survey after survey shows it’s the number one concern of retiring participants largely because of the uncertainty it creates.

We can no longer take a back seat to policymakers and regulators. We must work in better collaboration with them. We must not let others set the regulatory and legislative agenda or define the issues without active engagement from the retirement industry.

Many in our industry are now grappling with the DOL fiduciary rule and its wide-ranging, potentially disruptive implications. And while the DOL took thousands of pages of comments and days and days of testimony from our industry about the rule in advance of its establishment, one fact remains clear: We did not approach the government with a united voice on what we wanted.

Going forward on policy matters, we recommend that a strategy of intra-industry engagement could be far more effective than what any one of us could accomplish alone.

We can have a greater impact if we join together and approach policymakers with one voice united on behalf of the millions of Americans we serve every day.

That is why Empower retirement worked with SPARK to convene an industry-wide forum on October 19 at our offices in Boston.

Some 25 industry players came together for a day to put our collective heads together. The goal was to create a comprehensive retirement policy that could be presented to the new administration and Congress.

Participants at the session engaged in discussions on numerous topics ranging from the DOL fiduciary rule to guaranteed income safe harbor guidelines to the establishment of an employer mandate for retirement plans, among other topics.

The discussion will continue with the development of specific legislative action and communications plans. Attendees agreed to use their collective expertise and experience to help legislators and regulators understand the value and benefits behind various proposals.

We believe there is an appetite for pension reform in Washington that we haven’t seen in quite a while, and there’s a need to seize this opportunity to engage legislators while we have the chance.

We’re looking forward to working with our industry colleagues to help President-elect Trump and the new Congress effectively move the needle on retirement policy.

1. Source: Demystifying the 401(k) plan investment process, published by
2. Source: Ten Important Facts About 401(k) Plans, published by the Investment Company Institute.
3. Source: Lifetime Income Score VI: The Road Best Traveled April 2016, published by Empower Retirement.


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