What's in the episode?:
Debt limits, ESG, presidential vetoes—how in the world did SECURE 2.0 pass in an overwhelmingly (and increasingly) partisan Washington? Where does retirement policy go from here, and what about that MAJOR retirement policy proposal that some members of Congress are considering right now—what are its prospects currently?
Drew Crouch, Senior Tax and ERISA Counsel at Senate Finance Committee, joins American Retirement Association CEO Brian Graff to answer these questions and more. It’s a fascinating discussion you won’t want to miss.
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Brian Graff: Hello everybody, this is Brian Graff for another [episode] of the series DC Pension Geeks Podcast and we've got a really special pension geek today with us. His name is Drew Crouch, who is with the Senate Finance Committee, and I like to start these Drew by, you know, giving people a little bit of background about you. I want you to tell us kind of what your role is with the Senate Finance Committee and kind of what you do, and you know how did you land here? I mean it's kind of a cool job and I've told people my favorite job ever was working for the Congress at one point in my career. How did you end up in this exciting position.
Drew Crouch: Well, gotcha. Thank you, Brian. There's a lot there to unpack and I just want to start off by saying first I really appreciate the opportunity for you to invite me on to the Pension Geeks podcast and before I start, I just have to say you know the remarks that I share with you today are my own and not to be attributed to any other member. You know any member of the Senate finance committee or any member of Congress. So, stepping back. How did I get here to this podcast today? You know, you know, it's interesting. After law school, I decided to attend a graduate tax program and as part of my studies there. I took several classes that are related to employee benefits taxation and then interviewing with employers, you know, out of that program, I found that at the time, you know, there were lots of law firms that were looking for ERISA tax associates um, to join their practices and so that was what I was hired to do about twenty-five years ago and I ended you know what well I don't know about that I was one of the people who was interested in doing it I was lucky to get hired and so I ended up joining a very large Washington DC law firm and that's all I did.
Brian Graff: Because no one else wanted to do it.
Drew Crouch: You know, at the law firm [I] was a practice employee about law and specifically Title II tax work. From there, I was hired by the office of the IRS Chief Council to write pension regulations and I did that for a number of years. And after I had done that for a while, you know some folks reached out to me about joining a congressional committee on the hill and I thought um, you know you know interview with the folks. They all seem very nice. You know Capitol Hill wasn't on my radar. But I remember thinking that time that you know I wasn't sure you know when this type of opportunity would ever come up again. So, I thought why not let's do it and that was I guess gosh about fifteen years ago and so at this point.
Brian Graff: Did you… So, did you succeed Judy Miller when she left? Am I getting that right?
Drew Crouch: Yeah, Judy Miller, I don't think was at the joint committee on taxation. I was succeeding Trish McDermott. Yeah, Trisha McDermott and folks some benefit folks may have heard of her, but she was a longtime IRS chief council employee and then she was in the joint community taxation.
Brian Graff: Yeah, known [her] for a very long time.
Drew Crouch: Gosh, for I want to say, like a decade and a half. Yeah, and so any way you know fast forwarded from there I've been at um, several you know three congressional committees where my focus has always been on employee benefits. And I also did a stint at the Treasury Department. I'm working on underfunded multiplayer pension plans.
Brian Graff: People on the outside sort of, you know, I think there's surprise that there is sometimes they think there's no expertise with, you know, staff on the Hill. Obviously, you have a tremendous background technically.
Drew Crouch: Ah.
Brian Graff: And employee benefits, but you know, even when I was there, frankly, everyone there tends to be like maybe 1 or 2 people that are more technically steeped in employee benefits. Is it a challenge sometimes working with other staff because you know they just they don't have the background that you have, and this is complicated stuff when they're making proposals?
Drew Crouch: Oh, sure. Actually, you know what I found at, you know, in my time on Capitol Hill is that you know, you know staffers, you know, for the most part, are actually much more steeped in sort of the technical details than sort of forks might be aware of um, we do tend to cover sort of large portfolios. And as part of that, I think it's always important for any lawyer professional to sort of know what you don't know and I've really found that on that whole, you know, most folks have a very healthy respect for that. The other thing is that we a wide array of impartial professionals. That can be pulled on to focus your knowledge a little deeper and to sort of handle those really technical nitty-gritty questions and so an example of that would be the joint community taxation which functions as sort of the in-house. The confidential tax law office for all the offices in Congress and the committees. So, of jurisdiction.
Brian Graff: So, people. Obviously, you know, [people] watch cable news, you know, unfortunately for them. Clearly, there is a lack of bipartisanship. Is the really the environment that exists today is much more well…I mean, it's always been partisan. People say sometimes it's more partisan now than ever. I think it's more publicly partisan now than ever. Just because of social media because of cable news. But somehow retirement has seemed to kind of stay out of the fray. It's sort of, you know to me, it's remarkable and it's wonderful and I'm grateful for it. You know, when we you had your hearing, and I was fortunate enough to be able to testify at that hearing in advance of SECURE 2.0 in it. It was amazing. You know, kind of the kumbaya moments and experiences that the members on both sides of the dais were having. Why do you think? That's the case why what makes retirement policy so special I mean, juxtaposed against like social security, right? Or Medicare. Where you know there's the typical more partisanship going on what is it that makes retirement policy unique?
Brian Graff: Oh, that's the thing that we're going to treat as bipartisan.
Drew Crouch: Yeah, it's a great question and I wish I knew the source of the magic or just why exactly it is that the retirement policy tends to be bipartisan. I think the one thing I'll say you know there's an important… There's an important catalyst, if you will, about why that happens. And it really has to do with the members of Congress. Keep in mind I'm just staff, so my job at the senate finance committee is to advise the chairman and then the other Democrats on the committee as well as other Democrats and in the U.S. Senate on tax aspects over term and policy. But it's really the members of Congress that set the policy staff are there to help execute what it is that the members of Congress are interested in, and I will say that in retirement policy. There have always been a number of both Democrats and Republicans who are highly engaged on this issue and that really tends to set the tone.
Brian Graff: And you think they are the one's kind of pushing to keep this bipartisan?
Drew Crouch: Oh, absolutely and I think you see that reflected in recent retirement legislation as well as prior iterations to the legislation that made it across the finish line. Go yeah.
Brian Graff: This has been going on for thirty years now. I mean since 1996, frankly, it is kind of a remarkable run. Do you think you know now that Rob Portman has retired, obviously Ben Cardin is still around. Do you think that will be able to be maintained or do you think things might get a little bit more partisan?
Drew Crouch: No, I actually do expect that there will be one or more Republicans who will voice and show leadership in retirement policy after Portman. As to who that is I don't have a crystal ball. We'll have to see how that shakes no.
Brian Graff: Well, what? Any guesses who's sort of indicated now? Not, you're not willing to go guess all right now, right? So, every bill that you know when I was on the Hill is set up as lobbyists, I mean, I worked on a few.
Drew Crouch: No, I don't want to put you in the office on the spot.
Brian Graff: Retirement bills like you have, there's always boo-boos. That's a technical term and speaking of technical, the more appropriate, I guess correct way of describing it is called a technical correction.
Brian Graff: These are things… What's your definition of what a technical correction is and what's the process for making that determination?
Drew Crouch: Sure, I mean a technical correction. You know, I guess it's more art than science. But the key concept here is that the intent of the U.S. Congress is it different or is at odds with what the actual technical language that was actually enacted. And sort of the clearest cut technical is something, for example, a clerical miss-reference or a cross-reference that isn't quite right, but there could be other tech types of technical too and sort of the key thing to understanding technical corrections is there's a process for sort of identifying them resolving them and that's where the four or sometimes even eight committees or staffs of jurisdiction will get together and sort of review issues that um, the practitioners and then stakeholders. Um, and the retiring community identify and then make a decision a consensus decision. So, all the Republican… Democratic staff to the committees of jurisdiction over you know whether something is indeed a mistake and typically, the technical correction process requires a legislative fix and typically, those legislative fixes have been bipartisan in nature. So that when there is agreement from all the committees of jurisdiction, their staffs then technical, you know a technical correction legislation or drafted and then that will be added at some point to must-pass legislation to become law.
Brian Graff: So, do you? Obviously, there's a big question around Roth, right? Any insight as to whether that's going to require legislative change or not?
Drew Crouch: Yeah, we don't know yet [with the] SECURE 2.0 of legislation [that] passed in December and we'll start working with the Treasury Department and IRS to identify. You know, any technical issues that have arisen… so that certainly is one that we're looking at but as to the exact outcome whether a legislative fixes. Necessary to whether it could be handled by regulations and indeed sort of what the type of waiter might be; these are things that the staff are still working through so I don't want to put the cart before the horse but this is something that we are taking a hard look at and I do ask. You know, the folks who listen to this podcast if they see things.
Brian Graff: Sure.
Drew Crouch: The security point of legislation that they don't think represented intent. It's always helpful to sort of hear from stakeholders and practitioners about what does they think and so you know, we had a number of it's see about like half a dozen and a half of sort of. Issues like that and we are taking a hard look.
Brian Graff: Obviously, we've given you our list. Very much appreciate your willingness to take a look at that. You mentioned that you know technical corrections typically are put on so-called must-pass legislation. What would you envision assuming there are some things that have to get fixed legislatively is there something that you think could be characterized as must pass this year
Drew Crouch: Oh, sure, I mean, just one example would be the appropriations legislation to fund the federal government. So, the federal government has [defended] it annually and it generally runs off the federal fiscal year, which starts October 1st and so we have funding in place an appropriate appropriation. Bill was passed in December. Which allowed the SECURE 2.0 legislation across the finish line. It had been attached itself to an appropriations bill to fund the rest of the federal fiscal under 2023 and beginning October 1st, we'll have to have appropriations language in place to fund the federal government for the fiscal year 2024. Otherwise, there'll be a government shutdown and so that might be an example of somewhere where you can attach must-class legislation.
Brian Graff: Is Biden concerned about being a must-pass legislation about the debt limit? I mean, there's a lot of conversation about it. Like a month or so ago and then all of a sudden it got quiet because of other things that were going on. I think it is somewhere June-ish timeframe, right? We're running into a problem and so what? What is Senator Wyden’s thinking on this? Because obviously, you know, as stewards of retirement savings, we're worried about the potential impact that a default would have on, you know, devastating the fact would have on people's retirement savings.
Drew Crouch: Sure, you know this is something that all the members of Congress are very interested in putting, you know, Chairman Wyden in it. You know, it's something that you know folks are working on. It's not actually something that's in my particular portfolio. You know I handle retirement policy and not. You know, not sort of broader economic issues for the committee but it is certainly something that folks are very aware of. You are right; the clock is ticking. It's something that Congress needs to resolve sooner rather than live.
Brian Graff: Yeah, I don’t think there's an awareness about [it]? The pocketbook impacts the stuff that they're playing around with here.
Drew Crouch: With it.
Brian Graff: Ah, it won't be necessary, but it may be necessary for us to impress upon folks. I know Chairman Wyden gets this but about the potential impacts? The real impacts on people's retirement savings could be really significant. You know you've accomplished quite a bit; congratulations you've done lots of legislation, most recently SECURE 1.0 and SECURE 2.0. What's next? Where we go from here? What are the things that you think are left undone? And in a big-picture sense.
Drew Crouch: Who actually… and let's step back and think about the security point of legislation. The amazing thing about that and how it came together in the finance committee is it really was driven by the priorities of all the Democrats and Republicans on the committee. And so, you know, there's a staffer who's my counterpart for the Republican staff and at the very beginning in the process, you know, senators… you know Chairman Wyden and ranking member Crapo. We put together a bipartisan markup that really collected the ideas of, you know, all the members of the committee. And so, you know that markup was held in June of 2023… excuse me, 2022, it really was a good year and a half lead time. Where me and my counterpart went to each of the Democrat and Republican offices and the Finance Committee and said, “Hey you know we're going to be working towards a markup.” You know what your ideas are? What would you like to see you know you know offered at that at that markup? And we spent a year and a half leading [and] helping folks from technical aspects to make sure it worked right? You know gauging member interest and really what you saw in that markup was you the work product of all those different offices and so looking to the future.
Drew Crouch: You know, I think we'll need a little bit of time to sort of regroup but there's always retirement proposals to sort of refine and perfect the current system that we have and so I would expect that in this Congress and the next folks will be drilling back down. Talking to stakeholders about areas in ways in which current retirement laws. Don't either produce good outcomes or could be tweaked to make things work a little better and we'll just have to see… I mean, Congress is the marketplace of ideas. And we'll have to see sort of what it is that individual member offices. Bring forward.
Brian Graff: What about like auto-enrollment? Do you think that there's interest? You know there's a requirement for new plans that's in SECURE 2.0, [and it] doesn't really go into effect until 2025. Practically I think a lot of folks are talking about just implementing it right. What about for existing plans in that area? I think is it that would be something you think will be looked at, given the data that shows how powerful automatic enrollment is.
Drew Crouch: Yeah, I mean, I think it's something that folks will have an interest in. I mean, I think it's premature to say whether there's something like that across the finish line on a you don't on a bipartisan basis. But you know the interesting thing about... The legislation you know apart from what we've passed and SECURE 2.0… know that proposes to implement. You know, auto-enrollment type plans in there, for example, like Senator Whitehouse and Ranking Member Neil. You know, have a proposal that would create sort of a national [auto-enrollment] program. So, [what’s] left is the appetite for that sort of legislation in the future.
Brian Graff: Right? And that you, well, there's apparently some Republicans think mandates are okay in some respects, so you never know… Requirement the word Band-Aid eight sometimes is not favor. There are a bunch of proposals that the chairman was in favor of as part of the bill Build Back Better. You know Roth and you know what he felt were kind of abusive situations. Are they going to be revisited at some point?
Drew Crouch: Yeah, I mean, Senator White does have an interest in news reports that have come out about folks. Some folks have extremely large IRAs in some cases. Tens of millions of dollars or even hundreds of millions of dollars.
Brian Graff: See, I think some in the billions.
Drew Crouch: In assets that will help there. Yeah, perhaps and you know… I think we step back and think about [it]. We have favorable tax rules for retirement. It's to encourage folks to save and I think the underlying point. These very large account balances are whether there really needs to be a taxpayer-provided subsidy to encourage folks to save at that type of level when you have accounts that are that large it really starts to look like inter-generational wealth planning as opposed to an incentive to save for retirement. Um, income.
Brian Graff: You know, I think you've said in other remarks that there is some concern about inequity in the way those incentives are distributed. Talk a little bit about what you think might be looked at in the you know, next iteration of retirement legislation.
Drew Crouch: Sure, there is a concern you know there's data out there. For example, an AARP has put together data. You know, in the last year, that talks about, um, folks who don't have access to workplace savings and so for example, by some estimates, you have as many as 50, 55, 57 million folks who don't have access to workplace savings funds like throwing 401(k) plans or sub and simples or other saving vehicles and there's always you know a concern on the Congress about that and how to do we can encourage more employers to offer these plans.
Drew Crouch: And part of it goes to There's a great statistic that ASPPA and now ARA has put forward on the power of workplace savings plans on folks’ ability to save and maybe Brian you could talk a little about that because it's a really interesting contrast how you guys dug that up. About how likely faster.
Brian Graff: Oh, which I mean it's based on work that we did with EBRI. You know people who have, I mean folks on this already listening and heard me say this so many times, but you know, people… who are covered by a workplace savings program are 12 to 15 times more likely to save than on their own in an IRA. I mean, workplace savings work and we share the agreement that coverage… the coverage gap is definitely something that needs to get addressed now… there is a relatively new proposal that has gotten some bipartisan interest that would address this gap by creating a federal, federally run retirement program for the… intended to cover the uncovered… although we have concerns that. If the government subsidizes them… You know, a more generous match or not elective contribution… that, you know… profit-maximizing companies would just decide to shift their employees over to the government program. That proposal kind of juxtapose against [Neil’s White House] proposal, which is seemingly less onerous on its face. It just basically kind of a national mandate for employers above a certain size to have some type of, you know, plan you know.
Brian Graff: This I guess, gets thrown into the mix of the marketplace of ideas. Do you think those big-picture ideas are going to be part of the mix and you know what the likelihood of anything happening anytime soon?
Drew Crouch: Sure, Yeah, actually I do think those ideas and others, you know, and I think we'll be part of the mix, you know, and I think just the broader thing to think about is, you know, what ideas are there out there to meaningfully provide benefits to folks. You know. 50,000,000 plus folks who don't have access to workplace, you know, savings plans, you know as to what idea might make it across the finish line I, you know, I really couldn't say as I say here today but you know it's something that you know is on my mind as well as other you know retirement policy staffers you know on Capitol hill.
Brian Graff: Let me finish with one last question following up what you just said. Do you think that this coverage gap is sustainable politically? In other words, at some point, you know, we keep on. Whacking at it at some point… do you think bigger measures might be taken by Congress if it's not addressed?
Drew Crouch: I hope so. I mean you know I you know, one thing I found that in retirement policy. [That] Congress is relentless [in] trying to get better results and so I think that's what you've seen with these retirement bills that have come along. I think, take, for example, the SECURE 2.0 Act. I mean, it's a collection of ninety-plus different provisions that are oftentimes are very much in the weeds but they're all really designed to sort of to figure it out. You know how it is that you know complex retirement. You know policy rules and regulations. [They] can be better to sort results in and better outcomes for retirement savers and I think part of that discussion is how do we bring? You know those 50,000,000 plus… know the employer or workplace savings in the know retirement system. But as to whether it happens in this Congress or the next Congress and sort of which specific proposal it is the folks might coalesce. You know, time will tell on that one that's something where you know, the individual minor births congress, you know, really set the agenda for that and identify what solutions. It is that that they're comfortable with and acting.
Brian Graff: Awesome, Drew! Thank you so much for your time and you know it ultimately comes down to getting more people to access that meaningful opportunity to save and it's great to have people like you continue to work on that incredibly important issue. So, thanks for your time.
Drew Crouch: But no, thank you, Brian and I'll just add… you know we really appreciated the suggestions that come from ARA on changes to retirement policy as well as their stakeholders and so I do ask folks keep up on coming up with the great ideas and sending them to us.
Brian Graff: Thanks for all you do.
Brian Graff: Oh, you, you can count on that. Thanks, Drew.
Drew Crouch: Not all ideas are possible. But, um, but we do want to hear them. So, thank you Of course.
Brian Graff: I appreciate it. Thank you! Thanks! Thanks for your time.