The incoming Chairman of the Senate Finance Committee has a recommendation for the Department of Labor as it crafts new fiduciary rules: Stop.
“We shouldn’t have DOL writing these sort of things,” Sen. Orrin Hatch (R-Utah) told reporters after comments made at an event held Dec. 15 in Washington by the Financial Services Roundtable, according to ThinkAdvisor. That’s not surprising, considering that Hatch has introduced legislation that would, among other things, restore jurisdiction over the fiduciary rules in the tax code to the Treasury Department.
“We have spent a lot of time in recent years defending the gains we have achieved in the 401(k) system. But in 2015 we can, and in my opinion should, go on offense,” Hatch declared, emphasizing the importance of encouraging employers who don’t currently sponsor plans to set them up.
Reemphasizing themes he noted when he addressed NAPA’s DC Fly-In Forum in September, Hatch reminded the audience that legislation he introduced last year, the Secure Annuities for Employees (SAFE) Retirement Act (see “Will Retirement Legislation Get a Restart in 2015?”), would create the “Starter 401(k),” a plan designed for small or start-up businesses that are not in a position to contribute to a plan but still want to help their employees save.
The SAFE Act would also allow unrelated small employers to pool their assets in a single 401(k) plan via an open MEP, or multiple employer plan, and would encourage the purchase of fixed annuity contracts for retirement, including a liability safe harbor for employers.
Hatch cautioned that as part of the unending effort on Capitol Hill to find more revenue to pay for increased spending, some have proposed reducing the allowed contributions to 401(k) plans and IRAs. “That, in my view, would be both short-sighted and foolish,” he said, noting that while some in Congress seem to have forgotten the history of this issue, Congress has already examined it and “made the policy call decidedly against contribution reductions.”
Hatch, who has indicated previously that he plans to reintroduce the SAFE Act next year, said he considers the bill’s prospects in the 114th Congress to be “pretty good” — though he cautioned that, “…there are some who would prefer to turn retirement policy into yet another front in the political gamesmanship that consumes so much energy in Congress.”
