Retirement consultants share key messages delivered to legislators on retirement plan polices

Boston, MA July 2019 - Marsh & McLennan Agency New England Retirement Consultants and National Association of Plan Advisor (NAPA) Delegates; Lisa Buffington, Molly Lindert, and Brian Bartkus attended NAPA’s D.C. Fly-In Forum July 23-24 in Washington D.C.. There they met with federal policy makers to advocate on important retirement legislation that will significantly improve retirement savings for millions of Americans. 

The team met with the Senate and House Representatives’ offices for the states of Massachusetts and Connecticut and emphasized the following key points.

The SECURE Act needs to be passed now.  

The Setting Every Community Up for Retirement Enhancement (SECURE) Act will improve America’s retirement security by expanding retirement coverage through Multiple Employer Plan (MEP) arrangements and by including meaningful tax credits and automatic plan design this creates a safe harbor for small employers. SECURE also allows long-term part-time workers to participate in 401(k) plans. Approximately 50% of working Americans are not covered by an employer sponsored retirement plan, and when considering the average social security benefit of $16,000 ($350 a week), it is mission critical to get this important legislation passed. 

Before we lead in to our meetings on Capitol Hill, Congressman and Chair of the House Ways and Means Committee Richie Neal spoke to us and reinforced the criticality of this retirement legislation and the strong bipartisan support backing it.

The Retirement Enhancement and Savings Act (RESA) has similar provisions as SECURE – both include fiduciary safe harbors for plan sponsors that offer in-plan retirement income solutions. Both bills also include proposals to extend the Required Minimum Distribution age beyond 70 1/2 which helps preserve retirement savings for plan participants.  It is our hope that the House and Senate can reconcile the two bills and pass the retirement legislation by itself or attached to another must-pass vehicle.

The Wall Street Tax Act must be re-written to exclude 401(k) Plans. 

The current legislation (also referred to as the Financial Transaction Tax) assumes 0.10% fees on the sale of stocks, bonds and derivatives This is problematic for 401(k) plans when you consider participants’ ongoing contribution deferral, fund transfer, loan and hardship withdrawal activity. A study published by The Investment Company Institute, shared at the Fly-In Forum, proved this tax, as currently written, would increase 401(k) plan investment expense by 31%.  Bottom line, the Financial Transaction Tax Legislation would be detrimental to retirement plan savings.

The Portman-Cardin Bill and Retirement Security and Savings Act (RSSA)

The Portman-Cardin Bill and RSSA will allow employers to assist workers with a student loan matching program so they can save for retirement and pay off their student loan debt. Creative fixes to nondiscrimination testing would be required in order for this benefit to apply to small employers. When considering the average student loan debt of $33,000, representing close to $400 per month, this employer voluntary benefit could drive meaningful retirement savings for employees during the years they can’t afford to save for retirement on their own.

We asked out retirement team what they gained from this experience. Lisa Buffington, Consultant said “It is our top priority to make sure our clients and their retirement plan participants are taken care of and it’s our job to advocate on their behalf. I am eager to share what we’ve learned on the Hill with our clients so they feel educated, empowered, and at ease. I am appreciative of the NAPA and ARA organizations’ efforts to give retirement plan consultants and advisors a voice on these issues that is heard on Capitol Hill”.

Brian Bartkus, Supervisory Principal, said, “Each time I visit Capitol Hill and meet with House and Senate Legislators and Staffers I am reminded of how important it is that we educate them on the causes and effects of the bills they vote on. I feel it is one of our most important activities of the year.”

About Marsh & McLennan Agency- Marsh & McLennan Agency LLC, a subsidiary of Marsh, was established in 2008 to meet the needs of midsize businesses in the United States. MMA operates autonomously from Marsh to offer employee benefits, executive benefits, retirement, commercial property & casualty, and personal lines to clients across the United States.