In a bit of an unorthodox general session opening on Sunday afternoon, NAPA Executive Director and American Retirement Association CEO Brian Graff immediately threw to Preston Rutledge, telling attendees of the NAPA 401(k) Summit that the head the Employee Benefits Security Administration (EBSA) had an important meeting in Washington to which he must return.
The Assistant Labor Secretary then took the stage as the familiar strains of Steppenwolf’s “Born to be Wild” blared from the PA.
“I was kidding when I said I wanted walk-on music, but I guess they didn’t understand,” Rutledge joked, before telling the gathered retirement plan advisors, “Not to butter you up, but I’m not that important, you are. You are important to the employee benefits system of this country it’s a testament to how critical you are in the private sector for Americans retirement.
Noting he’s been with EBSA for 15 months, he listed priorities from its regulation and enforcement agenda.
“Our mission is to protect retirement, health and workplace benefits for Americans. We have 800 employees nationwide, but it’s a large universe for a small agency, and we must figure out how to leverage our resources.”
Regulatory priorities
He noted its regulatory priorities are driven by the executive order from President Trump last August.
“We recognize it is a voluntary program, but coverage must increase,” he argued. “Plan sponsors must have more choices, especially at the lower end of the market.”
With that in mind, he described two directives that relate to the President’s EO:
- Clarify and expand so-called multiple employer plans, and deal with the “one bad apple” provision.
- Complete a review of retirement plan disclosures to ensure they are understandable and cost-effective for plan sponsors.
“The Pew Charitable Trust found that 37% of businesses that do not offer retirement plans site their cost and complexity,” he added.
His comments on the fiduciary rule pricked attendee ears, specifically when describing its counterpart, the SEC’s Reg BI.
“I think the SEC rules is a welcome development,” he diplomatically stated. “Our goal is to align, build up and harmonize with their agenda.”
The issue of missing participants was then raised, with Rutledge making an appeal for education and information.
“We want to understand the process and procedures [for finding missing participants] up until now so we can better understand.
However, he added that audits have rightly focused on whether benefits have not been paid for some time.
“The purpose of a [defined contribution] is to make sure accrued benefits are paid. There’s so much focus on the accumulation of benefits, but what’s the point if they’re not paid.”
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.