National Association of Plan Advisors’ Executive Director Brian Graff took the stage at the advocacy organization’s 401(k) Summit on Sunday afternoon in Las Vegas to deliver his annual “From the Hill to the Summit” presentation.
His remarks, which followed Assistant Secretary of Labor and EBSA head Preston Rutledge’s opening keynote, touched on MEPs, PEPs, legislative priorities and more.
“Preston Rutledge just spoke about electronic disclosure,” Graff began. “It was something I talked about at last year’s summit, we fanned out on a fly-in day on Capitol Hill, and the president included it in the executive order. That’s NAPA, folks. If you don’t feel like your voice is being heard, it is.”
Noting that “Preston has left the building, he told attendees it was time to “talk about what’s really going on,” and flashing a slide of Rep. Alexandria Ocasio-Cortez, D-New York, and President Trump.
“AOC has more Twitter activity and all major news outlets combined,” he said, referencing the Congresswomen’s acronym. “That’s influence. She’s incredibly smart, she’s made some freshman mistakes (which is to be expected), but don’t underestimate her. She mirrors a large portion of the electorate who feel disenfranchised.
“Protests are not happening in the streets, they are happening in the cloud, and they are incredibly effective,” Graff added. “I predicted at last years summit that there would be a political swing to the left in this country, and with GND, Medicare for all, there has. The resulting proposals are being talked about, but they’re not being necessarily as radical.”
The Wall Street Tax Act
It was only a matter of time, therefore, before something was introduced that affects the retirement plan industry, he said, before launching into a description of the Wall Street Tax Act.
“Proponents say it will reduce costs and volatility in the markets, so it’s a liberal unicorn! It’s also supposed to go after Wall Street fat cats, but who does it really affect? American workers,” he claimed before noting one predicted result is a 20 basis-point increase in the cost of the average target date fund.
“Retirement is not a geeky industry issue; it’s a political issue. The lack of coverage is politically unsustainable, and a reason for movement at the state level. It is one reason why we are supporting a proposal that would require every employer with 10 employees auto-enroll them at 6%.”
There would be no matching or testing, “so it’s free for employers,” Graff explained.
“It would be a requirement to have a plan, and the private sector would fulfill on that requirement. It means 30 million to 40 million new entrants to the retirement system. What we have seen from the UK and early data from the state of Oregon is that 70% of those participants that are auto-enrolled stay enrolled.”
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.
