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Browsing Defined Contribution

2021 Retirement policy legislative agenda

With the Democrats in control of both houses of Congress, they are now in a position to move legislation. In what follows we discuss, briefly, the procedural issues that may limit what legislation may be viable, and then consider a variety of proposals that indirectly or directly affect retirement policy that Democrats may consider giving priority.

New Administration, new Congress

With the focus currently on how President-Elect Biden will staff his new Administration and on the change in control of the Senate, we provide a brief review of the key Administration jobs that President Biden will have to fill, and the key Congressional leadership, that directly affect retirement savings policy, and some of the issues they will be considering.

DOL releases final fiduciary advice Prohibited Transaction Exemption

On December 16, 2020, the Department of Labor released a final class Prohibited Transaction Exemption (PTE) allowing “investment advice fiduciaries … to receive compensation, including as a result of advice to roll over assets from a Plan to an IRA, … that would otherwise violate the prohibited transaction provisions of [ERISA] and the Code.”

Annuity Purchase Update: December 2020 Interest Rates

Pensions experienced their strongest month of the year in November. The average duration 7 annuity purchase interest rates increased 4 basis points and average duration 15 rates increased 1 basis point since last month as seen in the below graph titled Annuity Purchase Interest Rates.

Annuity Purchase Update: November 2020 Interest Rates

Pension plans have experienced unprecedented volatility in 2020. While the market volatility has caused the treasury rates to drop dramatically, the spread between treasury bonds and the bonds insurance companies invest in have widened. The widening of this spread typically tells us that now would be a good time for pension plans to purchase annuities.

Biden Administration agency agenda

In this article we review possible retirement policy agency initiatives of a Biden Administration. We will follow up with a discussion of possible legislative initiatives when the Congressional situation becomes clearer.

SECURE 2.0 – the Securing a Strong Retirement Act

On October 27, 2020, House Ways and Means Committee Chairman Neal (D-MA) and Ranking Member Brady (R-TX) released the Securing a Strong Retirement Act – a set of retirement savings policy changes with bi-partisan support. The bill builds on changes made by 2019’s Setting Every Community Up for Retirement Enhancement (SECURE) Act and may provide a template for further improvement of our current retirement savings system.

DOL releases final ESG rule

On October 30, 2020, the Department of Labor released its final rule on consideration of environmental, social, and corporate governance (ESG) factors in retirement plan investments under ERISA’s general fiduciary rules.

Supreme Court review of excessive fee litigation?

On June 19, 2020, plaintiffs in Hughes v. Northwestern University – an “excessive fee” case – filed a Writ of Certiorari, asking the Court to review a Seventh Circuit decision affirming a district court’s grant of defendants’ motion to dismiss.