D.C. Pension Geeks
Welcome to DC Pension Geeks, a conversation with top retirement-related policymakers and regulators in and around Washington. Hosted by Brian Graff, an attorney, accountant, former Capitol Hill staffer, and now CEO of the American Retirement Association, it’s an inside view of the ups and downs, ins and outs and sometimes surprising turns Washington takes on the road to ensuring a secure retirement for millions of hard-working Americans.
D.C. Pension Geeks
Preston Rutledge - What the Election Means for Retirement Plan Policy
Oh, what an election it was. It determined not only the presidency but control of both houses of Congress. Now that it’s settled, people rightly wonder what it means for retirement planning and saving policy.
“It was kind of a big deal,” American Retirement Association CEO Brian Graff understatedly said. “And given the fact that it’s a big deal. We need a big deal to help us sort out what happened and what it means.”
That “big deal” is none other than Preston Rutledge, former head of the Employee Benefits Security Administration (EBSA). The Founder and Principal of Rutledge Policy Group joined Graff to discuss the fate of the fiduciary rule, Social Security’s future, and much, much more.
My suspicion is most of the folks coming in in the new administration are going to be fairly confident that the court is going to toss the rule out, especially because now it's going to be reviewed in a post-Chevron environment.
Speaker 2:DC Pension Geeks brings you exclusive conversations with top retirement policymakers and regulators in and around Washington DC, hosted by Brian Graff, an attorney, accountant, former Capitol Hill staffer and CEO of the American Retirement Association. If you're looking for an insider's view of all the twists and turns that Washington takes on the road to ensuring a secure retirement for millions of Americans, you're in the right place. Welcome to DC Pension Geeks.
Speaker 3:Welcome everybody to another episode of DC Pension Geeks.
Speaker 3:Welcome everybody to another episode of DC Pension Geeks.
Speaker 3:Since we last spoke or I guess since the last time you heard from me we had an election, and not just any election, but a presidential election, a determination of who would control the House of Representatives and the Senate Kind of a big deal.
Speaker 3:And given the fact that it's a big deal, we kind of need a big deal to help us sort out what happened and what it means for retirement, the retirement plan universe. So that big deal that I'm talking about is Preston, none other than the Honorable Preston Rutledge, former Assistant Secretary for Labor for the Employee Benefit Security Administration. Many of you know him in that capacity. He's spoken at many, many industry conferences, but also, as I think I pointed out last time that he was on this podcast he also served for many years as the benefits counsel and, among other responsibilities, for the Senate Finance Committee Republican staff staff. So Preston is uniquely qualified to talk about what the impact of this election is going to have, both from a legislative standpoint but as also a regulatory standpoint. So, preston, thank you for spending some time with us today.
Speaker 1:Well, thank you for inviting me, Brian. I'm pleased to be here, and I think another reason you might have wanted me on this particular podcast was when I worked on the Senate Finance Committee. We passed the 2017 Tax Cuts and Jobs Act.
Speaker 3:That's right, you were a witness.
Speaker 1:Those expiring provisions are the ones that are front and center, starting 2025. Those expiring provisions are the ones that are front and center, starting 2025.
Speaker 3:Yes, you were a witness to the last time Republicans were able to employ reconciliation in 2017. So let's start with that. Can you explain to everyone as best as someone can, because it's pretty arcane parliamentarian stuff? Um, what does it mean for when one party controls congress? Uh, how does it impact the legislative process and, in particular, uh, tax legislation?
Speaker 1:well, when, all when, the same party controls house, senate and the presidency. It means that if you, if you, can pass a bill through reconciliation, you know the president will sign it. So it's a live exercise. What is reconciliation? Normally, as we know, in the House it just takes a majority to pass a bill on any topic of any kind. In the Senate, it requires, when it comes to legislation, it still requires a 60-vote supermajority. There's a filibuster. You cannot pass legislation unless you can get either 51 votes.
Speaker 3:Well, in the case of the presidency being the same party, it would be 50 votes and the vice president to break the tie.
Speaker 1:But there's only one, only a couple of.
Speaker 3:I think you meant to say 60 votes. What?
Speaker 1:did I say 50. I'm sorry about that. Yes, 50 plus the vice president to break the tie is the bare minimum you can use to pass legislation or anything else to get the you know, get a confirmation for a cabinet position or anything. The relevance of that is there's a procedure called budget reconciliation and, yes, it's very arcane. It's been around for a few decades now, and what it allows the Congress to do is have the budget committee give instructions to the various committees, like the Senate Finance Committee that says you know, you can spend up to X without paying for it. So in 2017, the committee had the authority to go to spend up to $1.5 trillion to reduce taxes. An interesting quiz, though, that people forget that there's four things you can do in reconciliation you can raise taxes, you can lower taxes. You can raise, you can increase spending, you can decrease spending. That's pretty much it. You can't do things like raise the minimum wage or, you know, start a new, you know a new department or something, or or change the fiduciary rule.
Speaker 1:Change the fiduciary rule, and so that's what you're allowed to do, and because there's been a couple of cycles now when, when there's been reconciliation, it's kind of been focused on tax only when there's been reconciliation it's kind of been focused on tax only, some people may have forgotten that. Another way, another thing you can do in reconciliation is raise spending and reduce spending, and this administration may be kind of uniquely interested in reducing federal spending and looking for ways to do that in reconciliation. And the reason it takes all three bodies is it has to pass the House, it has to pass the Senate and it has to be signed by the president, and that only happens when it's all Republican. That's how it was in 2017 with Republicans, that's how it was in 2021 with Democrats. The American Rescue Plan and in fact, I think the wasn't the Inflation Reduction Act also a reconciliation bill. The Democrats did too. They did Because you're allowed to do one every fiscal year and you get two fiscal years per Congress, and that applies to this Congress.
Speaker 1:This Congress will do a reconciliation bill very soon, next year, focused mostly on tax, but when that's all done, they actually will be able to do another reconciliation bill, if they want to, during the 119th Congress before it expires. There's one really important thing you cannot do in reconciliation. It will absolutely bring the bill down, destroy the bill, and that is Social Security. You cannot touch Social Security and that includes the Social Security payroll taxes, it doesn't matter. You can't touch Social Security in reconciliation.
Speaker 3:So let's step back a second, because this is complicated and you don't learn about this stuff on Schoolhouse Rock, although they should have had the filibuster song. That would have been awesome. So just again to reiterate what Preston was saying normal order legislation in the Senate subject to a filibuster. To clear the filibuster and bring the bill to final vote, you need 60 votes. Then, once you've cleared the filibuster, it's a straight 51 majority to pass legislation. The problem typically in the Senate, which is designed to slow things down by the people that created our constitution, is that it's often very hard to get past the filibuster, because very rarely does one party have more than 60 votes, does one party have more than 60 votes in the Senate, and that's certainly not the case in this instance. So reconciliation is one of those rare exceptions to the filibuster rule. Nominations for Supreme Court justices is another rare exception to the filibuster rule.
Speaker 3:Okay, so now that we clarified that, you mentioned something that's very important, because a lot of people don't realize that reconciliation is a two-part process. The first part is you set the targets and it's not a very long bill in terms of pages. It's like a little Excel spreadsheet written into legislative text and basically what it says, preston is. Here's the amount of money net that we're letting you spend on tax legislation, net being if you can contribute to the deficit this much, you can do it via a combination of raising taxes and lowering taxes, but the net has to be no more than a particular number. Is that accurate?
Speaker 1:Correct, and this bill, this instruction, these targets, so to speak, are issued by the budget committees, not the tax writing committees or the or the appropriations committees. It's so for a very short time. At the beginning of this year, the chairman of the two budget committees are going to be very, very well-known people.
Speaker 3:Right, and you know, of course this is a very highly negotiated process between both houses of Congress and the White House is going to be very involved because this is going to, you know, this is the keys to everything else that you're going to eventually do. So last, typically, when we've done this over the last several decades at least, most of the focus has been on that net number and essentially we've done deficit spending through the tax code pretty repeatedly, in that they are actually talking about offsetting tax legislation with spending reductions.
Speaker 1:I think that'll be in the mix. There's one other thing that's unique they're thinking of offsetting by raising tariffs. Tariffs are a tax. Now, normally, you know, the president of the United States has the unilateral authority to impose tariffs. Tariffs are a tax. Now, normally, you know, the president of the United States has the unilateral authority to impose tariffs. And if the president does it like they normally would, that wouldn't count quote unquote for Congress's legislation, because that's like something the president can just do. But if Congress Congress has the power to enact a tariff into legislation and if they decide to do that, they could get credit for whatever the Joint Committee on Taxation concludes is the amount of tax to be raised by that tariff over a 10-year period. That is something I've never seen in my career, but it can happen and it might this time.
Speaker 3:Now that's a good point to raise. Only because there's a process under the Budget Act, there's things that are allowed to be in reconciliation and things that are not, and you mentioned those before. It's not. You know, like most laws, there's some detail, but it's not a lot of detail. So there's been a lot of years and years and years of interpretations about what constitutes something that affects revenue and what doesn't. Right and, by the way, the tariff question isn't absolutely crystal clear because of the fact that the president has the authority on their on his own, the.
Speaker 3:There's a person and her name is Elizabeth McGovern and she's both of us know her and she's a brilliant lawyer of us know her and she's a brilliant lawyer and she is the parliamentarian been in that role for a long time and she is the judge, in effect, of what the parliamentarian of the Senate.
Speaker 1:The House has their own parliamentarian, but the parliamentarian of the Senate is where the action is, because of parliamentarian's ability to decide. Even if you're, even if you present an amendment, even if you include a provision that amends the internal revenue code, it's not automatically, it can't. It'll start in the bill, but a challenge can be made in front of the parliamentarian and will be made by the opposing party. If it looks like it's more of a policy shift party, if it looks like it's more of a policy shift than a revenue raiser or a revenue expenditure and that is not a bright line that is a parliamentarian decision and you mentioned decades of precedent. They try to follow their precedent.
Speaker 1:The basic question that has to be asked and answered is is the provision predominantly budgetary or a policy? If it's budgetary, you can do it, meaning increase or decrease taxes. If it's primarily policy, you won't be able to do it. And one of the biggest indicators of whether it's primarily budgetary is what does JCT? How do they score it? Do they say it raises $500 gazillion? Well, that's almost certainly going to be budgetary, but if it raises only a really small amount, it might look like more of a policy shift without much of a tax effect, and she might wash that out.
Speaker 3:And so, behind the scenes, this is a big part of the process and a big deal. It's a big part of the process, a big deal, because these bills will have hundreds of provisions in them and, if I recall correctly, part of your responsibility at the Finance Committee was to be the advocate for these in front of the parliamentarian for many provisions. Is that right?
Speaker 1:That's right and the way that works. Again, it's all behind the scenes with staff, but think of a think of a court of appeals with five judges, a chief judge that's. That's Elizabeth, elizabeth.
Speaker 3:McGovern. Elizabeth the definitely not Elizabeth Warren.
Speaker 1:Right, I started to Sorry about that. Mcdonough, not McGovern, thank you. And she has four other Definitely not Elizabeth Warren on one side and all the Democrat staffers on the other. Everybody that's there that's knowledgeable about a particular provision and we have a hearing about it. I mean, there's even a nickname for it. It's like it's called a birdbath named after Senator Robert Byrd, who drafted all of these things, and he said you can put it in, but it can be taken out if it doesn't meet these conditions, meaning the mostly budgetary, not mostly policy.
Speaker 1:And so you have these debates and you go toe-to-toe with one of your colleagues on the finance committee on the other side With me. It was almost always Mike Evans, who's now left the Hill and has gone to K&L Gates. He's a master parliamentarian advocate. He and I went toe-to-toe in 2017, probably 25 times on different over a course of weeks. We get this thing done and then the parliamentarian will say thank you for your input. Very much like when you're submitting briefs and oral arguments to a judge. Parliamentarian goes back and then A few days, maybe a day later, maybe two days later usually isn't very long An email gets sent out to the staff directors of the two committees and it says here are the decisions.
Speaker 1:This stays in, this goes out, it just goes down. It gives a little bit of explanation, but not a ton, and you figure out. And that's when you learn whether you've won or lost. I almost didn't want to go here, but I'll tell you. The rules are so strict that if one side wanted to be petty about it and I say that because we and the Republican staff have a table of contents, because a table of contents doesn't affect the budget, and she sits there and I know she thinks it's nonsense, but she has to agree because it's correct and she says you're right, table of contents comes out. If you've ever wondered why there's no table of contents in these massive tax bills, it's kind of sad.
Speaker 1:I kind of wish people could grow up just a little bit. I mean, for example, or the title of the bill, or the title of the bill so, uh, so stepping back from you know, and that stuff and that's kind of the you know important behind the scenes stuff that's going to happen, this process.
Speaker 3:What really is going to matter here is this what's that, that top line? What's that top line, that net number, correct? Uh, because the bigger that net number is or you know, it really obviously will depend on the degree to which their spending reductions are actually real and meaningful and are helping to reduce the cost of the bill embedded in there. That's going to be money that they have to raise by increasing taxes to offset how much they're going to be spending on taxes.
Speaker 1:Correct.
Speaker 3:And that's where obviously the concerns for us lie, because the more that they have to raise from the tax code, the higher the risk to the retirement system, because historically, for better or worse, we have been used as a piggy bank to pay for other stuff, the most recent example being the Rothification proposal in 2016?.
Speaker 1:Let me say that, and just to illustrate, we've read a lot about how merely extending the TCJA individual provisions will be some $4.5 trillion, $4.6. Yeah, and set aside the other proposals which will cost money. We know the president's talked about no tax on tips, no tax on overtime.
Speaker 2:No tax on social security benefits.
Speaker 1:Yes that, but that's raising. I'm sorry, you're right that cutting those. So even I think there's a couple more in there that were very popular and I do believe he's serious. Those will have to be stacked up too. So let's just say, let's say, the whole world really was just the 4.6 trillion. If the budget committee gave the same instruction as they did in 2017, that was a $1.5 trillion instruction you would need to raise. My math is quick here 3.1 trillion.
Speaker 3:That's correct.
Speaker 1:Yes, but let's. So maybe it's going to be more this time It'll be, maybe it'll be 2.6 instruction and you have to raise 2 trillion still a lot of money.
Speaker 3:Well, but remember now this time some of that 2 trillion may come from spending reductions.
Speaker 1:Correct, correct, correct, but setting that.
Speaker 3:This weekend, the department of the currently pretend Department of Governmental Efficiency. I say pretend, I don't want to offend anybody, but it doesn't exist yet. It's a concept that only Congress can create a department. But they have this list of out, squeeze and leave alone, I think, of the three categories, and there's a whole bunch of departments that are out, including not only the Department of Education but the VEX. I guess you can't say tweet anymore, whatever they call. A message on X had the Department of Labor going out. So you know, I don't think people, at least like me, I don't think you either think that's not very realistic. But you know who knows what they'll be able to come up with in terms of spending reductions, but I doubt it's going to be $4.6 trillion.
Speaker 1:Yes, no-transcript that. And he wrote something to the effect of I'm not sure we need this department and I want the next administration to take a second look at this and see if we really need it. I thought, imagine, Well, that didn't happen. A hundred plus years later, yeah, If President Taft was right, who knows, maybe I've exited on to something. Sorry I joke, but who knows, it might not be.
Speaker 3:Bottom line is there will be some spending reductions. How much is obviously speculative at this point. So whatever that net number is, if it's bigger then obviously they have to raise less in tax.
Speaker 1:So, to help keep the podcast from going totally off the rails, let's just maybe we should confine the rest of the time to talking about the core piece of okay, they're going to rate, they want to reduce taxes, so which taxes are possibly on the chopping block to be raised? And we are worried in the retirement industry that we look like a piggy bank and we have to be vigilant. Uh, I'd like to give you a couple of observations of mine that go back to 2016, the year before the 2017 bill, secure Act, which passed the Senate in 2016. People think of the Secure Act as passing in 2019. Well, it did, but under an earlier name and virtually indistinguishable from the final bill passed out of the Senate in 2016,. It had some pay-fors to pay for SECURE, to pay for the SECURE Act, and there was a bit of a whopper in there. It was called the Stretch IRA and it raised $15.7 billion. Now, that's serious money for a tax reform bill that pay for was laying around and available. When we worked on the 2017 tax bill, there wasn't even a hint that we were going to touch that. We knew that was for the SECURE Act. We knew that retirement legislation was bipartisan. It traveled on its own path and even though that money was there for the taking, there was never even a hint. Now there was one thing that happened that I think you referred to in a moment ago In 2016,.
Speaker 1:Sort of out of the blue came a proposal to turn all defined contribution deferrals into Roth, the Rothification of everything. That blew up in faces in a way that I still feel like the idea of all roth is is pretty much dead. There's been more roth um tweaks. There have been more roth razors. In fact, there was a really large one in for secure 2.0, but I feel like it's more of like roth around the edges, not so much going core Roth.
Speaker 3:Another thing that gives me some. Well. When you say Roth around the edges, do you think the backdoor Roth remember the backdoor Roth proposal that was in Build Back Better. Do you think Republicans might grab that?
Speaker 1:You know that's a possibility, but let me tell you the thing that was, I thought, misguided about putting those sorts of things into Build Back Better. Build Back Better was the Democrats the.
Speaker 1:Democrat only bill and when you put a retirement provision in one of those, it kind of gets I'll call it tainted. I mean the Republicans think, well heck, you know you shouldn't do that to us and we're not going to let that happen. And they have long memories. I was a little worried. Remember Build Back Better took place in the summer of was it 2021 and 2022? I'm trying to remember the exact year now, but the Secure 2.0 had already been marked up in the Ways and Means Committee.
Speaker 1:The Secure 2.0 was much larger in terms of provisions than even secure and there were some whopper Roth pay-fors in there which I thought sort of sucked up the oxygen for the future. One was the all Roth for catch-ups, for catch-up contributions for folks making more than $145,000. That raised $22 billion. And then the matching Roth, where an employer makes a match, it's the employer's, the employer option. They can make the employer match Roth. That raised $12 billion. I mean we're looking at $34 billion, $34.6 billion in raisers that were already had been marked up and approved by the Ways and Means Committee and a bipartisan markup of Secure 2.0. That was sitting there and it and despite the, the, the, despite the Build Back Better pressure and the pressure on Build Back Better to pass it on the Democrats and despite the fact that they did put some other provisions from the retirement world into Build Back Better, they never touched the Secure 2.0 or even tried to touch those Secure 2.0 razors and use it for anything other than Secure 2.0.
Speaker 3:I think you're raising a really important point because we I know you and I for a very long time, others who've been working in this area for a long time have really striven to keep retirement policy bipartisan, bipartisan, yes, and you know, and, and frankly, we've been pretty darn successful at keeping it that way for probably since the mid 1990s and which is a long time, as my kids say.
Speaker 3:So I think that has that helps our cause now, because there's a little bit of an aura around retirement stuff that and both sides sort of like, oh, I'm not supposed to do that, because this is supposed to be the one bipartisan thing that I actually work on which helps us. As you're kind of alluding to it, it's almost like you call it a taint, but the fact that if I would go down this road it would poison this bipartisan atmosphere, again being the one subject area in the tax world that people seem to manage to keep bipartisan. So I think one of the reasons it's important because I think some of our listeners should know this but they don't we've already started working on Secure 3.0. And it's already being done on a bipartisan basis with both sides sort of continue this aura that, hey, you're not supposed to do retirement stuff. That's supposed to be for the bipartisan bill.
Speaker 1:I think that's true and, if history holds, that's how it will occur. I mean, we have to stay vigilant. Obviously I'm positive that the Senate staff on the Finance Committee and the Ways and Means they've got all these. They know about these bills that are designed to go into Secure 3.0, whenever that is, and it won't be until after tax reform. But they know those provisions are there. They have a collection of pay-fors, some of which have been around sitting on shelves even since I was there, that have never been used. They know about those. I know they're holding them for Secure 3.0. That's what they want to do right now.
Speaker 3:Is it?
Speaker 2:possible.
Speaker 3:But let me just interject about the vigilance part, because I agree with you. Committee staff are great. You were one of them, I was one of them, we're great, but we only have so much power. And ultimately, the thing about taxageddon or taxarmageddon, whatever they're calling this thing. You're not allowed to call it tax reform, by the way, when you've got the entire tax code in play, principles are involved, the actual members, and they're making choices between what's the state's tax exclusion going to look like, what's the top individual rate going to be, what's the top corporate rate going to be, what about international tax changes? What about small business tax incentives? Blah, blah, blah. And all of these things have huge constituencies behind us, and so at some point, push comes to the shove, committee staff can say whatever they want. If they need money, they're going to be looking everywhere for money, and that's where the risk for us is.
Speaker 1:And let me put it this way, you're right, and that's where the vigilance comes in. I feel comfortable. The staff is on our side on this. However, if there comes a point when the representatives and the senators change their minds, they're the ones who have the election certificates and they and the staffers will have no choice but to cough up the razors, open up the drawers, pull out the razors. You know, they it. They are not the ultimate decision makers, and they know it. It isn't. They really do know.
Speaker 1:When I was a staffer, we knew the boss was the senator, it was Senator Hatch. It wasn't, it wasn't our staff director at the end of the day, or it certainly wasn't ourselves, but we had everything ready and we, uh, we, we, we, we tried to keep and we were successful for all the years I was there in keeping um, um. There's probably only one example, the one that comes to mind most frequently, of a retirement space razor that has been used outside of a pure retirement bill, and it's that funky, odd razor involving defined benefit plans called pension smoothing. They used a little bit of the pension smoothing in the American Rescue Plan. Didn't raise any eyebrows, defined benefit plan stuff, for some reason.
Speaker 1:Yeah, well, a lot of that is because the industry it's very time sensitive and the industry wants it yeah, yeah, if the, if the economy is in such a state with interest rates and whatever, that that defined benefit funding is in a crisis, that kind of overcomes everything and that's how we got actually that's how we got pension smoothing in the first place. It was it. It was added to the to the highway bill called Map 21 and Map 20, map 2012. It was it was the summer of 2012 that we created pension smoothing when I was there, and that was to actually to help pay for the highway bill. I think I even joked on a presentation recently at the ERISA 50th anniversary. I said we used we use pinch and smoothing to smooth over, smooth over, smooth over the potholes all over the country with the highway bill. So that was different. That seems to have gotten its own, its own little yeah.
Speaker 3:I think, I think the risk is on things. So people, I mean, are they going to get rid of the 401k? No, um, you know, 401ks are very popular, as we'd like to say, the only code section the American people actually know. Um, but again, if push comes to shove, I think the risks are maybe a little bit more rough around the edges, as you describe it. Maybe, um, freezing the COLA limit for a few years, maybe the comp limit, haircuts?
Speaker 1:Now haircuts can add up.
Speaker 3:Haircuts can add up to harm. I don't want to minimize that, and so that's where I think the vigilance is going to be particularly important.
Speaker 1:And the knock-on risk beyond that is, if they do get used in 2025, then they're not available to help us pass CQ 3.0. That's right.
Speaker 3:All right, let's switch gears. It's going to keep us super busy, obviously, but down the street Department of Labor, not very far down the street, assuming that it's still in place. The questions come up what happens to the regulatory agenda there? And let's start with the ever famous soap opera long, longstanding drama, regulatory drama, the fiduciary rule.
Speaker 1:I believe the fiduciary rule will be ignored for the time being because it's tied up in court. There's been a stay, the rules have been stayed. The other one, I think, is the ESG rule is also being reviewed in court. I would anticipate the department will have other things on their mind that they need to do through regulatory action and they'll wait and see how the fiduciary rule turns out in court. In fact, my suspicion is most of the folks coming in in the new administration are going to be fairly confident that the court is going to toss the rule out, especially because now it's going to be reviewed in a post Chevron environment.
Speaker 3:Much like what happened the first time around. When the Trump administration came in, they didn't defend the rule anymore and the court vacated it.
Speaker 1:Right, and I was there when the ruling came down in March of 2018. The ruling came down, but there's a couple of other things. First off, at a global level, the first thing that will absolutely happen because it happens every time will be a directive that, whatever ruling projects you're working on, put a freeze on them until we get people in there to look them over and decide whether we want to proceed or not. So that would be something in the pre-rule stage. That would be something in the proposed rule stage that's out for comment. They're not going to let you finalize a rule that, even if it's out for comment, they're going to the comment period will probably, but the comment period can come to a close. They're not going to let you finalize. So let's. I think there's two examples for me that stick out of things that will not happen, and it's not a massively long list. One is it's in the pre-rule stage.
Speaker 1:One was got a lot of attention this year earlier was something called pension risk transfer. Congress in Secure 2.0 told the agency to revisit it. They thought maybe the 1995 guidance that governs that area is out of date. The DOL decided they studied it. They decided they weren't going to change anything for now, but they were going to still keep looking at the issues that need to be addressed and then the long list of issues in their report. Basically they they probably at some point would um, if it was a second Biden administration, um, or a Harris administration, they probably would have come back to that and decided to redo it, I would think, update it. I think that's that's probably dead. I don't see this administration pulling up PRT the other one that's in process and I think we may see a notice of proposed rulemaking before January 20. It's kind of in the weeds. It was mentioned at your recent conference in Orlando called sort of reworking, the 5,500, the quote improvement and I know that it's probably putting people to sleep to mention the 5,500, but there's a schedule in there called Schedule H, where you have to list the plan's investments and they want to take that Schedule H and make it much more detailed, much more drilled down, much more. You know where they want the investment information to be much more mindable and much more detailed. It's kind of viewed as well. First off it's going to mean a lot more detailed information going into the hands of the government and that makes people nervous right out of the box, right out of the box. It's also there's a suspicion that it might be a stealth attack on plans that invest in private equity and private credit. My sense is that will automatically get stopped at the NPRM stage if the NPRM is published until it's reviewed, and my suspicion is, if it's allowed to go forward, it will go forward. Probably in a less intrusive fashion, would be my suspicion. Those are two that come to mind and that's not a long list.
Speaker 1:There's another thing that happens with, by the way, on the health side and I know this is all about pensions, but employee benefits security administration spends at least half of its time on health. I think the things they're working on in health are a lot more likely to be continued at some point by the administration the things involving mental health, parity, price transparency, health, you know, health, provider, doctor charges, hospital charges, price transparency, um, um, the, um, um, the, the, the process by which doctors can challenge how much they're, they're, they're reimbursed by by providers and hospitals. I think there's a lot of, a lot of um, sensitive, a lot of um, uh, a lot of agreement in that area. One of the biggest things they worked on when I was there was trying to make um, medical costs and surgery prices more transparent. So those might stay.
Speaker 1:And there's one that an old rule, an old nugget, that they might actually revive. It's known as the Association Health Plan rule. It was passed and it was enacted in 2018. It was struck down by the courts in early 2019. But in the District of Columbia District Court, the District of Columbia Circuit heard oral arguments on why that was a bad decision. The Justice Department wanted the judge to be reversed. I think the AG from New York was in favor of striking it down but the DC Circuit sat on that case and never decided it.
Speaker 1:And then, and then, when the Biden administration came in newly in 2021, they asked the court to just put a pause, not to decide it, that they were going to revisit it. And what they did was they ultimately they being the DOL published the original rule, the old rule, again. So we're striking it. We're just going to go back to the old rules. So that's sitting there and I don't believe anybody in a new Trump administration is going to feel like that decision to strike that AHP rule was correct. And there was after that an association retirement plan rule based on the same logic. That was not even challenged, much less vacated. So we might see that one come back and it fits perfectly with the goals of this administration coming in to give smaller businesses more options to find ACA-compliant health plans at lower prices by banding together in larger groups. But that's way too far in the weeds.
Speaker 3:There's another, by the way. One more thing, preston, though, that you didn't mention there is a provision in Secure 2.0 on electronic disclosure. Well, that was a rule that right.
Speaker 1:In the last administration we got the retirement regulations done. The last one we got done was the electronic delivery. And then Secure 2.0 carved that back a bit statutorily and said you had to put out at least you had to deliver at least one 401k statement per year in paper.
Speaker 3:But also that would have opened I think there was some. They did an RFI at the department that would suggest that they were going to revisit the rule. That's probably not going to happen now, right.
Speaker 1:I think that would not happen now. I agree. But to roll back the one paper statement, if you think it's that big of a deal that would take legislation, I'm not sure that's a big enough issue to get members of Congress you know legislating.
Speaker 3:No, they passed on a bipartisan basis. Yeah, it did, it did.
Speaker 1:Then don't forget our old nugget, the Congressional Review Act During the first few months of the Congress. This is another obscure law that is designed to stop Congress from I'm sorry, from stopping an outgoing administration from promulgating a so-called midnight regulation right before they leave the office, and it gives Congress the authority and it doesn't require and the filibuster here again doesn't apply. Congress can pass what's called a resolution of disapproval of a regulation that's enacted too late in the previous Congress, and if the president signs it, that regulation is not only wiped off the books, the agency is banned from ever writing a substantially similar regulation. Now, we to this day don't know what substantially similar means, but it was used once by the first Bush administration. It was used, I think, 14 times in 2017. And I was involved in two of those involving EBSA regulations that were passed late. In fact, one of them passed on January 16 of 2021, right before the inauguration Will.
Speaker 1:Are there any regulations from the DOL that are going to be finalized late enough in this presidential term to be eligible for CRA? I'll be honest, I'm not sure there are. They seem to have gotten their regulations done earlier this time. Yes, there are a couple that are very controversial, but they're only going to be able to go back so far, maybe six months or so, and I think pretty much DOL got their regulations done. I think April was one of the ones I saw that came out. That was rather controversial. I don't think they're going to be able to reach all the way back to April of 2024 to pull down a reg.
Speaker 3:Well, people are describing this as a change election, and our world has definitely changed in a pretty significant way. So, preston, we could probably talk for hours. This is just sort of the high level highlights discussion. Really appreciate your time spending with us today to give folks a taste of what's to come.
Speaker 1:And I would like to compliment our audience, because you must be pension geeks to feel like this is a high level discussion. Let's be very knowledgeable, because most people would have no idea what we're talking about. Yeah, didn't let it, brian, come on.
Speaker 3:This is the pension geeks podcast. So, yes, there is a prerequisite of knowledge that's required to listen, or at least there should be. All right, my friend. Thank you again, preston, and thanks to everybody listening. You'll be hearing more from us soon.
Speaker 1:Thank you.