Gillian Kemmerer, Asset TV
Welcome, I'm Gillian Kemmerer, and today we are joined by Aliya Robinson, managing legal counsel in Legislative and Regulatory affairs at T. Rowe Price. Aliya, a pleasure to have you in the studio today. We're nearing the conclusion of 2023, if you can believe it, so, where are retirement policymakers focusing on right now?
Aliya Robinson
Managing Legal Counsel, Legislative and Regulatory Affairs
T. Rowe Price
So right now, the focus is really on SECURE 2.0—a little bit of a different focus depending on who you are. So for the retirement industry, including plan sponsors, consultants, advisors, they are laser-focused on SECURE 2.0 implementation. There are a couple of mandatory provisions that they are obviously focused on, but there are so many optional provisions that really require discussion to determine to what provisions are best for your plan and for your participants.
The second group are the regulators who are focused on SECURE 2.0 guidance. The IRS in particular has the bulk of this responsibility, as they are responsible for over 80 of the over 90 provisions in SECURE 2.0 Act, and they still have provisions that they’re working on from the original SECURE Act that have since been amended by SECURE 2.0. And the DOL as well has several provisions that they’re working on, so their focus is really on guidance and making sure they’re getting that out.
And then Congress is looking at two pieces of SECURE 2.0, the SECURE 2.0 technical corrections which Hill staff has said that substantively are done, they're just waiting for a package for it to move on. And the parity for 403(b) plans, which would allow 403(b) plans to invest in collective investment trusts the same way that 401(k) plans can. Tax provisions were included in SECURE 2.0, but we still need securities provisions. So all of these groups are focused—Congress, those two provisions they’re focused on, but really beyond that, not so much focused on SECURE 2.0, they’re really looking at new ideas, big ideas, wanting to get to the next phase of the retirement policy.
Gillian Kemmerer
So you've mentioned now the Congress is looking at big ideas. So does that mean that they're looking at SECURE 3.0?
Well, they’re not calling it that. The original SECURE Act and SECURE 2.0 were really worked in tandem. As a matter of fact, SECURE 2.0 was being worked even before the original SECURE Act was passed. And so they really are seen as building blocks. Right now, Congress is looking at a blank slate. And so there are many ideas they’re looking at, but two areas in particular that they’re focused on.
- One is increasing retirement coverage. They are looking at ideas as big and bold as mandating 401(k) plans, for all employers to make sure that every worker has a plan they can participate in, all the way down to small technical changes, such as decreasing the minimum participation age from 21 to 18, or allowing voluntary auto-reenrollment.
- The second area that they're looking at is retirement income. So a lot of focus has been placed in the last 50 years of ERISA on accumulating assets, getting people into plans. And I think we’ve done a really good job on that. But now Congress in particular is looking at how do we help people through their retirement and really making sure that what they’ve saved will also be there for them as they go through retirement and not just at retirement.
Gillian Kemmerer
And how does the upcoming presidential election impact retirement issues?
Aliya Robinson
So one area where there will be a lot of conversation and debate is over Social Security reform. Even though the trust fund isn’t depleted until 2034, congressional staff is saying that they’re already hearing from constituents that they don’t think Social Security will be there for them at all. And so presidential candidates will take this as an opportunity to show where they are on Social Security and bring out their ideas for Social Security reform.
The second issue is more retirement adjacent, and that's taxes. So the Tax Cuts and Jobs Act expires in 2025. So for those who support that legislation, they will use this as a time to show their support and possibly ideas for expansion. And those who oppose it will state their opposition and also their alternatives for other ideas.
In both of those cases, we’ll see new retirement ideas spring from those. In addition, we’ll see a lot of oversight activity. We’ve already started to see some of this with Congress bringing in heads of agencies and writing letters in response to regulations that have been proposed. I think we’ll see even more of this as we head into the presidential election year. And so with all of that, we won’t see a lot of legislation, but there will be a lot of activity and discussion that could drive further retirement policy.
Gillian Kemmerer
Well, a lot to keep an eye on, so thank you for giving us an inside look into Capitol Hill and how some of those decisions might be impacting retirement moving forward.
Aliya
Great. Thank you.
Thank you for tuning in. You just heard from Aliya Robinson, managing legal counsel in Legislative and Regulatory Affairs at T. Rowe Price.
