News from Capitol Hill

For those following retirement plan regulation and legislation, it has been a busy few days.  At the end of last year, there were efforts to pass comprehensive retirement plan legislation, but those efforts ultimately failed.  This year, major retirement plan legislation was reintroduced, and on May 23, both parties came together in the House of Representatives and passed Setting Every Community Up for Retirement Enhancements Act (the “SECURE Act”) by a vote of 417-3.  The SECURE Act includes a laundry list of changes for retirement plans that will apply to both large and small plans, and it is the first of its kind in over a decade.  Changes include, but are not limited to:

  • Increased tax credits for starting a retirement plan
  • Changes in restrictions related to MEPs
  • Simplification of the 401(k) safe harbor requirements
  • Provisions to encourage lifetime income options
  • And, so, so much more!

What’s the impact on plan sponsors?
For now, the legislation has only passed the House of Representatives, and it still needs to move on to the Senate.  Stay tuned and be on the lookout for additional updates!  If this comprehensive legislation passes the Senate, there will be changes that impact many existing retirement plans as well as the opportunity for many new retirement plans.

Fiduciary Rule
The Department of Labor’s fiduciary rule, which died in federal court last year, is showing signs of life again.  Earlier this month, it was reported that the Secretary of Labor indicated that the Department of Labor would be issuing a new fiduciary rule.[1]  Now, the federal government has updated in their Spring 2019 agenda confirmation that the Department of Labor will be back with a new version of the rule by December 2019.  Besides indicating the proposed release date of the new rule, no other information was made publicly available. 

What’s the impact on plan sponsors?

For plan sponsors, no action is required at this time.  Plan sponsors should continue to monitor the rule when it is released later this year (or early next year) to determine how the fiduciary rule will impact the service providers to the retirement plan(s).  In order to appropriately monitor service providers, plan sponsors should know the standard that applies to them. 

For more information about this news from Capitol Hill and how it may impact your plan(s) in the coming year(s), please reach out to a Multnomah Group consultant to learn more!

Notes:

[1] See NAPA Net, Acosta Indicates That DOL Will Issue New Fiduciary Rule, available at: https://www.napa-net.org/news-info/daily-news/acosta-indicates-dol-will-issue-new-fiduciary-rule.


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