On a recent family vacation we had the privilege of meeting the “big heads,” as my son calls them. As I viewed Mount Rushmore I began to think about the hundreds of workers who created this monument. I wonder if they ever had a chance to realize the magnitude of their work and the impact it would have for generations to come?
Since I spend much of my time focused on legislation/regulation I quickly made the leap to one of the most momentous pieces of legislation in our industry – ERISA. I wonder if those who carved ERISA realized their momentous work and how it would fundamentally change retirement plans? Yet unlike the men who carved their work into stone, legislators’ work is much more fluid.
In a recent blog, Decoding the DOL Proposed Fiduciary Regulations, I discussed how at this point in time we are in a state of change as we decipher the potential implications on ERISA. The fiduciary regulation proposal itself remains a very highly contested issue as witnessed by the overwhelming number of comments received. The public comment period closed on July 21st and will be followed by a public hearing the week of August 10. After the hearing, another comment period will be opened. After this comment period, the DOL will then have the task of reviewing all the comments and decide what to include in the final regulation.
Momentous time – significant implications
This is a momentous point in time with significant implications. If implemented, the current proposal could result in a dramatic reduction in essential financial advice and education at a time when much of our nation faces a real savings gap. In particular among low and moderate income individuals and small employers, the very groups the DOL is seeking to protect.1 See our recent infographic for specific examples of how retirement planning assistance makes a real impact on long-term savings.
The proposed regulations go to show nothing is set in stone, except of course for those “big heads.” By working together with regulators or legislators I’m hopeful we can seize this moment to make a significant and positive impact for American savers by preserving access to crucial financial education and assistance.
Helping to keep you informed
Stay tuned as this unfolds over the next several weeks and months. We will keep you informed through new blogs on the topic. Watch for an upcoming post from industry experts, Stephen M. Saxon and Jason H. Lee of Groom Law Group who will offer their perspective.
1 A sizable percentage of workers say they have virtually no money in savings and investments. Among RCS workers providing this type of information, 57 percent report that the total value of their household’s savings and investments, excluding the value of their primary home and any defined benefit plans, is less than $25,000. This includes 28 percent who say they have less than $1,000 in savings. Approximately 1 in 10 each report totals of $25,000–$49,999 (9 percent), $50,000–$99,999 (10 percent), $100,000–$249,999 (10 percent), and $250,000 or more (14 percent, up from 11 percent in 2014). Retirees provide similar estimates of total household savings. – 2015 EBRI/Greenwald Retirement Confidence Survey.
The subject matter in this communication is provided with the understanding that The Principal® is not rendering legal, accounting, or tax advice. You should consult with appropriate counsel or other advisors on all matters pertaining to legal, tax, or accounting obligations and requirements.
Stephen M. Saxon and Jason H. Lee of Groom Law Group are not affiliated with any company of the Principal Financial Group®.
Insurance products and plan administrative services are provided by Principal Life Insurance Company a member of the Principal Financial Group® (The Principal®), Des Moines, IA 50392.
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