EA Meeting Features Washington Update

By John Iekel • April 04, 2017 • 0 Comments

We have “an historic opportunity” — there is a “dynamic policy-making situation just ahead,” believes Earl Pomeroy, senior counsel at Alston & Bird and a former member of the House of Representatives.

Pomeroy addressed an April 3 general session of the Enrolled Actuaries meeting in Washington, D.C. cosponsored by the American Academy of Actuaries and the Conference of Consulting Actuaries.

Pomeroy’s session, “We Survived the Election — Now What?” addressed a number of policy, legislative and regulatory issues at the fore in the early days of the Trump administration. Panelists also included Andrew Remo, the American Retirement Association’s director of legislative affairs, and James Holland, chief research actuary at Cheiron, Inc.

All these discussions regarding tax and regulatory policy are taking place against a backdrop of budgetary realities, Holland reminded attendees. Holland noted that legislative changes “have an impact on the overall budget” and that there is a $20 trillion deficit, and said he thinks that the majority Republicans are “unlikely to want to add to that.”

Tax Reform

Now that the GOP health care bill is “on ice,” the administration is pivoting toward tax reform, said Remo. Holland was colorful on what exactly that means: “If you thought the discussion of the [Affordable Care Act] was contentious, wait for the discussion on tax reform.” Pomeroy agreed, remarking, “Tax cuts are a lot easier than tax reform. It’s a fully engaged fight.”

It’s unclear what tax reform portends for retirement plans, panelists indicated. Remo noted that the “latest Trump tax plan is silent on retirement plans” and Pomeroy expressed some confidence that they may not suffer significant change, saying “Retirement plans work so well, they’re almost politically unassailable.”

Still, they may not emerge unscathed. “The unknowns out there have people worried,” said Remo, who noted that the only guide to what tax reform may mean for retirement plans is the House Blueprint, which he says “has many people concerned.” The final product, he said, “will be dramatically different in my opinion” from the current proposals.

Fiduciary Rule

“Regulatory waterboarding” is how Remo said the ARA’s Brian Graff has characterized the protracted, tortuous process of drafting, reviewing and issuing the rule — only to possibly have the process begin again. Remo noted that the rule in its current form is significantly different from the version first proposed, and that there already has been a “very extensive regulatory process.”

But it is “very hard to unwind the clock,” Remo said, noting that there must be an equal regulatory process to change or undo the rule. Not only that, Pomeroy said he believed there could be litigation if the Trump administration refuses to apply the rule.

We are “likely to see a series of things,” said Holland, who indicated that the 60-day delay of the rule would give the administration time to propose a version that incorporated changes.