Hatch Outlines Pension Reform Plan
New Chairman of the Senate Finance Committee Orrin Hatch (R-Utah) has staked out his plans, and the committee’s agenda, for dealing with pension reform.
In his speech at the U.S. Chamber of Commerce last week, Hatch specifically highlighted key portions of that bill in his speech, pitching a new “Starter 401(k)” deferral-only safe harbor arrangement for businesses.
“The purpose of pension reform is to help hardworking Americans achieve financial independence in retirement,” said Hatch, going on to note that “…legislation I introduced in the last Congress, the Secure Annuities for Employee Retirement Act, called the “SAFE Retirement Act,” is designed to do just that.”
In addition to the items highlighted in his speech, Title II of the SAFE Retirement Act includes multiple provisions that ASPPA strongly supports and that are contained in ASPPA’s Proposals to Enhance the Private Retirement System, including:
1. giving additional time for small business owners to adopt a qualified plan,
2. abolishing the “top heavy” testing rules,
3. streamlining the interim amendment process, and
4. clarifying that forfeitures can be used to fund safe harbor contributions.
He also noted that the SAFE Retirement Act “ensures that hardworking Americans will continue to have affordable access to professional investment advice by restoring jurisdiction over the IRA fiduciary duty rule to the Treasury Department and requiring Treasury to consult with the Securities and Exchange Commission when prescribing rules relating to the professional standard of care owed by brokers and investment advisors to IRA owners. And it only makes sense to give Treasury the lead. After all, the fiduciary duty rule for IRAs is in the tax code,” he explained. The comments came in the wake of reports that the Department of Labor was readying its proposed fiduciary redefinition.
In total, the private retirement system provisions in Title II of the SAFE Retirement Act are designed to dramatically simplify the operation of qualified retirement plans by eliminating unnecessary paperwork and traps for the unwary, as well as providing new approaches to expanding the availability of workplace savings through qualified retirement plans, especially small business plans.
While Hatch has yet to re-introduce the SAFE Retirement Act in the current Congress, his speech is a clear indication that he plans to do so in the coming weeks.
The ASPPA GAC team looks forward to seeing an updated version of the legislation in short order and will work to get the favorable proposals included in the bill enacted into law.
Andrew Remo is ASPPA’s Congressional Affairs Manager.