The First 100 Days Are Done. Now What?
My colleague, Jeff Snyder, recently appeared on an Asset TV panel to discuss the implications of President Trump’s first 100 days in office on retirement plans (for those concerned about the future landscape of retirement plans, I strongly suggest a viewing). The discussion highlights many of the retirement plan-related actions that occurred during the first 100 days of the Trump administration. The question is: Where do we go from here? We’ll attempt to provide some answers in this edition of Top of Mind.
Trump’s first 100 days, with respect to retirement plans, have been primarily focused on the following areas:
- DOL Fiduciary Rule — Trump has most certainly had a direct impact, issuing an executive order delaying the applicability date of the rule until at least June 9th. Trump’s second choice for the Department of Labor (DOL) Secretary (as the first candidate withdrew), Alexander Acosta, is no fan of the rule and is reportedly looking for a way to have it effectively frozen. However, the rule is already final and effective, so undoing it is easier said than done. Jeff Snyder and his AssetTV co-panelists agreed that at least some provisions of the rule are likely to survive. Additionally, some experts are quietly advising financial service providers to prepare for a scenario where there are no further delays in the rule’s applicability date.
- State Auto-IRAs — While Trump recently signed into law a roll-back of the DOL regulatory exemption for state-run auto-IRA programs (and similar provision for state and county auto-IRAs), the effect may be minimal. Oregon, the first state to implement an auto-IRA is moving forward with its plans. In addition, PLANSPONSOR reported that the states would only need a DOL regulatory exemption if the IRA provision of the fiduciary rule survives, and many consider that provision to be the most vulnerable aspect of the fiduciary rule.
- Tax Reform — Many media and industry publications (most recently the Chicago Tribune) have been sounding the alarm over potential restrictions on the deferral limits of retirement plans, including a possible switch to an entirely after-tax (Roth) system. However, Jeff Snyder and his fellow panelists questioned the viability of a tax reform such as this, indicating that they would be surprised if any movement was made in this area. And, after some initial confusion, it is clear that Trump’s tax reform proposal would protect retirement plan tax deductions. Having said all of this, there are several House proposals that would impact the taxation of retirement savings. However, as Preston Rutledge of the Senate Finance Committee indicated in a recent interview, the Senate may not have much of an appetite for such proposals.
The first 100 days have certainly been eventful and leave us wondering what the second 100 days will bring. Be sure to follow us on Twitter for up-to-the-minute updates on any and all retirement plan developments!
Note: This feature is to provide general information only, does not constitute legal advice, and cannot be used or substituted for legal or tax advice.
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