“Washington didn’t see this coming,” NTSA Executive Director Chris DeGrassi said about the results of the 2016 elections in a Dec. 12 webcast. Elections have consequences, he noted, and those could include actions that affect retirement plans and benefits — including 403(b)s and 457s.
In “What 403(b) Advisers Need to Watch for in the 2017 Tax Reform Initiative,” DeGrassi said that retirement is “one of the side issues” as the incoming Trump administration sets its priorities and policy legislative agenda. Nonetheless, he also noted, while it is “still not at the top of the list,” federal regulation is a figures prominently on the list of priorities on the website the proto-administration has set up.
Fiduciary Rule
Does the election of Donald Trump have implications for the Department of Labor’s fiduciary rule? Maybe. “We know that the [Trump] administration is not too terribly interested” in the rule, said DeGrassi, adding, “The administration does not see this as a Main Street issue.” However, it is not totally off the radar screen, and he said that the President-elect and his advisors appear to be content to “push” the issue to whomever the new Labor Secretary will be.
DeGrassi said that there are three roads to changing or dropping the fiduciary rule: executive action, judicial action or legislation. Of the three, he said that legislation is the least likely avenue. The most likely, he said, is that some kind of action will be taken through the executive branch. “Everyone’s focused on the executive strategy as the most likely,” said DeGrassi.
But what that will be is unclear. Not only that, given that Labor Secretary designee Andrew Puzder must undergo confirmation hearings after the Jan. 20 inauguration and that the rule’s implementation is set for April 10, there really is a short window in which something can be done without great complications. “It’s possible that even if the [new] administration gets to it, there won’t be a lot of lead time,” said DeGrassi.
DeGrassi said that he considers it most likely that the Trump administration will seek to delay the implementation of the rule and modify it. He said he does not it expect it to just be withdrawn. “The notion that the rule is going to go away is very unlikely,” he said.
Tax Reform
Tax reform is one of the incoming administration’s highest priorities, DeGrassi noted. But tax reform does not come free — it has to be “paid for.” And one of the options for doing so, he said, its to streamline the federal tax code to eliminate loopholes, exemptions and deductions. “This is where we’re all affected,” he said.
DeGrassi said that the home mortgage deduction, the exclusion for state and personal property taxes, and the exclusion for Social Security benefits are “probably not” going to be targeted. “Where do you think Congress is going to target?” he asked, warning that tax expenditures on benefits are among the places Congress may look for revenue to “pay” for tax reform.
“We’re going to pay close attention of what [House Ways and Means] Chairman Brady has to say,” promised DeGrassi.
Sunset of 403(b) and 457
The sunset of the portions of the Internal Revenue Code under which 403(b) and 457 plans operate is another matter DeGrassi identified as on the horizon. One possibility is that retirement plans could be streamlined into a single Internal Revenue Code Section. “This is all about ideology. It’s all about simplification. It has nothing to do with policy,” he said.
Looking Ahead
“The ball is moving,” said DeGrassi. “Congress has ambitious goals.” But he also noted that while the House of Representatives is controlled by the Republicans, they are not monolithic and have factions that “have their differences.” Also, he said, “The Senate will still be a speed bump” since the Republicans do not have a 60-vote majority.
And DeGrassi reminded attendees that the NTSA is active concerning retirement plans. “We’re protecting what works,” he said.
More information about the webcast is available here; information about other NTSA webcasts is available here.
In “What 403(b) Advisers Need to Watch for in the 2017 Tax Reform Initiative,” DeGrassi said that retirement is “one of the side issues” as the incoming Trump administration sets its priorities and policy legislative agenda. Nonetheless, he also noted, while it is “still not at the top of the list,” federal regulation is a figures prominently on the list of priorities on the website the proto-administration has set up.
Fiduciary Rule
Does the election of Donald Trump have implications for the Department of Labor’s fiduciary rule? Maybe. “We know that the [Trump] administration is not too terribly interested” in the rule, said DeGrassi, adding, “The administration does not see this as a Main Street issue.” However, it is not totally off the radar screen, and he said that the President-elect and his advisors appear to be content to “push” the issue to whomever the new Labor Secretary will be.
DeGrassi said that there are three roads to changing or dropping the fiduciary rule: executive action, judicial action or legislation. Of the three, he said that legislation is the least likely avenue. The most likely, he said, is that some kind of action will be taken through the executive branch. “Everyone’s focused on the executive strategy as the most likely,” said DeGrassi.
But what that will be is unclear. Not only that, given that Labor Secretary designee Andrew Puzder must undergo confirmation hearings after the Jan. 20 inauguration and that the rule’s implementation is set for April 10, there really is a short window in which something can be done without great complications. “It’s possible that even if the [new] administration gets to it, there won’t be a lot of lead time,” said DeGrassi.
DeGrassi said that he considers it most likely that the Trump administration will seek to delay the implementation of the rule and modify it. He said he does not it expect it to just be withdrawn. “The notion that the rule is going to go away is very unlikely,” he said.
Tax Reform
Tax reform is one of the incoming administration’s highest priorities, DeGrassi noted. But tax reform does not come free — it has to be “paid for.” And one of the options for doing so, he said, its to streamline the federal tax code to eliminate loopholes, exemptions and deductions. “This is where we’re all affected,” he said.
DeGrassi said that the home mortgage deduction, the exclusion for state and personal property taxes, and the exclusion for Social Security benefits are “probably not” going to be targeted. “Where do you think Congress is going to target?” he asked, warning that tax expenditures on benefits are among the places Congress may look for revenue to “pay” for tax reform.
“We’re going to pay close attention of what [House Ways and Means] Chairman Brady has to say,” promised DeGrassi.
Sunset of 403(b) and 457
The sunset of the portions of the Internal Revenue Code under which 403(b) and 457 plans operate is another matter DeGrassi identified as on the horizon. One possibility is that retirement plans could be streamlined into a single Internal Revenue Code Section. “This is all about ideology. It’s all about simplification. It has nothing to do with policy,” he said.
Looking Ahead
“The ball is moving,” said DeGrassi. “Congress has ambitious goals.” But he also noted that while the House of Representatives is controlled by the Republicans, they are not monolithic and have factions that “have their differences.” Also, he said, “The Senate will still be a speed bump” since the Republicans do not have a 60-vote majority.
And DeGrassi reminded attendees that the NTSA is active concerning retirement plans. “We’re protecting what works,” he said.
More information about the webcast is available here; information about other NTSA webcasts is available here.
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