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Sen. Hatch Pension Bill Introduced – NAFA Goes to D.C.!

On July 9, Senator Hatch (R-UT), Ranking Member of the Senate Finance Committee, introduced S. 1270, the Secure Annuities for Employee, SAFE, Retirement Act of 2013. NAFA was among a group of other trade associations that was asked to meet with the Senator in Washington, D.C. for the introduction of the bill. NAFA also submitted a letter of support for the bill, which was included in the Congressional Record. In brief, the SAFE Act would create an optional new pension plan for state and local government employees using fixed deferred annuities. Additional retirement plan reforms are included in the bill along with language that would restore full jurisdiction over IRAs to the Department of Treasury and thus limiting the scope of any Department of Labor fiduciary rule. NAFA is pleased that the importance of fixed annuities is being promoted with this legislation, and NAFA was excited to provide input to the Senator while the bill was being crafted.

Tax Reform
Chairman Baucus (D-MT) and Chairman Camp (R-MI) have been publicly stating that they want to pursue comprehensive tax reform this fall. Additionally, Chairman Baucus and Ranking Member Hatch (R-UT) have been receiving comments from fellow Senators per their request for a so called “clean slate” approach for crafting legislation. NAFA continues to receive word from the Hill that inside build-up is on the table. In particular, we are closely watching for any proposals that might add means testing or change non-qualified rules. We anticipate more action this fall as the Senate Finance and House Ways & Means Committees release policy proposals. Certainly, nothing is likely to move too quickly at this point, as there are still broad differences between Republicans and Democrats over revenue rising, but we must be prepared to counter anything negative as the process moves forward.

DOL Fiduciary Rule
Thomas E. Perez recently became the new Secretary of Labor. We don’t know his position on a fiduciary rule, but have heard he’s likely to accept the recommendations of Assistant Secretary Phyllis Borzi. This fall, we still expect the Department of Labor to release a new proposed fiduciary rule that will cover IRA’s and annuity sales. However, there’s still pressure from the Hill regarding delaying a DOL rule, until the SEC determines if it’s going to act on a fiduciary rule. Indeed, on August 2, ten Democratic Senators sent a joint letter urging that the DOL rule be delayed, and recently a bill from Rep. Wagner (R-MO) passed the House Financial Services Committee that would mandate a delay. NAFA is monitoring this situation very closely, so please stay tuned as we will likely need your help contacting Congress very soon!

SEC Fiduciary Rule
The SEC request for information about standards of conduct for broker-dealers and investment advisers when providing personalized investment advice about securities to retail customers recently closed. Currently, the SEC is actively reviewing comments, making it a high priority, to determine if it’s going to propose a new uniform fiduciary rule. Most sources believe the SEC will likely propose a rule early next year. NAFA wants to make sure it doesn’t creep into the fixed annuity marketplace.

Federal Insurance Office
In the near future, the Federal Insurance Office (FIO) is expected to release a report on modernizing insurance regulation. Sources tell us the report is in “final draft” form and it will “ruffle some feathers.” NAFA will review the report as soon as it’s released and will respond as needed.

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