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Oh my Lord can someone please call Congress and tell them to stop???


austin3515

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To continue the quote from that article, "The bill follows the trend of expanding access to DC plans and may be incorporated into a larger package of retirement reforms. It also includes provisions such as requiring one year of service, not mandating employer contributions, providing nondiscrimination testing relief, and excluding younger workers from the plan audit threshold for five years."

Larger package of retirement reforms?!  Yikes

How many eligibility provisions can one plan have and not be a total compliance mess? 🤪

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After reading the financial statements of Power Corporation of Canada [TSX:POW] and its indirect subsidiary Great-West Lifeco Inc. [TSX:GWO] (which indirectly holds Empower Holdings, Inc.), I don’t worry about the profitability of the Empower businesses.

Peter Gulia PC

Fiduciary Guidance Counsel

Philadelphia, Pennsylvania

215-732-1552

Peter@FiduciaryGuidanceCounsel.com

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OK ya got me. but it's still got make ya mad.  A rule change here and there, ok.  But the stuff they're pushing is major major change...

But I suppose I was indirectly implying that perhaps others of a more human-like form might throw in the towel...

Austin Powers, CPA, QPA, ERPA

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I think the term "SECURE 3.0" should be outlawed. Too many negatives associated with the term. Call it Breckenridge's Scourge or something like that. (Some few of you might be old enough to remember "The Court Jester.") And as an aside, if you do remember it, Glynis Johns just passed away, at the age of 100.

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austin3515, you’re right that the proliferation of rules, variations, exceptions, and other complexity is confusing, overwhelming, and dispiriting.

It increases disrespect for law.

And yet you’re also right that we need more people who aren’t in the business of lobbying to speak up about how Congress legislates.

Peter Gulia PC

Fiduciary Guidance Counsel

Philadelphia, Pennsylvania

215-732-1552

Peter@FiduciaryGuidanceCounsel.com

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It's all computerized so what's the big deal, right?

I remember when I first started my boss had a cartoon-y series of 3 pictures in the office. The first said "TEFRA" and it showed someone sitting at their desk, all bright-eyed and eager to have at it. The second was "DEFRA" and the guy was a little less confident, sort of slumped over. And the third said "REA" and the guy had face=planted on his desk amidst a pile of papers.

Yeah it's annoying to say the least. The behavioral economists have taken over. 

Ed Snyder

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The ICI says $9.9 TRILLION is held in defined contribution plans of which $6.9 TRILLION in in 401(k) plans.  The BLS says 67% of private industry workers have access to employer retirement plans.

With that kind of money in play, there are a number of industries (primarily in the financial services sector) that lobby for expanding the number of people who can participate in retirement plans.  They also lobby for encouraging more new plan formation.  The financial services lobbyists have very, very deep pockets.

We also are seeing a sea change in the perceived role of 401(k) plans.  They started as an opportunity for an employee to enhance retirement savings.  The emphasis was on retirement and restricted access for other purposes.  The pandemic and natural disasters have changed everything.  We had massive unemployment and people needed money to live on, so the floodgates were opened to give participants liberal access to their 401(k) accounts. 

If we look at all of the new and proposed categories of penalty-free "qualified" distributions, many are centered around life events.  As the number of these distributions expands, the 401(k) is becoming more analogous to the Depression era cookie jar or rainy-day fund.  And the administration gets even more complicated.

If there is a path towards restoring the focus on retirement, it must come from plan sponsors.  It remains possible to have a plan design focused on retirement and to leave out or avoid a lot of the new features we are seeing.  Consider IBM's recent announcement to end the match and add back a traditional DB plan.

We cannot turn back the clock on 401(k)s and will have to live with the reality of their new purpose as an employee benefit.  We can work with clients to see the difference between providing for retirement and providing for life events.

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I have no problem with change, increasing coverage, and so on.
 

The problem is that we are making huge changes on an almost year by year basis at this point.  Major changes like LTPT or lowering the statutory age maximum from 21 to 18 cant drop year after with a very limited time until its effective.  We need time for major changes or chaos is all but guaranteed. 

 

 

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5 minutes ago, RatherBeGolfing said:

The problem is that we are making huge changes on an almost year by year basis at this point.  Major changes like LTPT or lowering the statutory age maximum from 21 to 18 cant drop year after with a very limited time until its effective.  We need time for major changes or chaos is all but guaranteed. 

Sometimes I feel like I'm the only one who sees this.  Thank you very much for saying this.

Austin Powers, CPA, QPA, ERPA

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3 hours ago, austin3515 said:

Sometimes I feel like I'm the only one who sees this. 

Ya know, @austin3515, you are also permitted to "call Congress".  Try your own Representative and Senators.  Also, the various committees receive online comments.

I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.

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It never hurts to develop a relationship with your members of congress.  They work for YOU, and if they have a good staff they will also want to develop that relationship.  

You can also volunteer for Government Affairs Committees for the various industry organizations you may belong to.  I know a lot of people here on the boards are already involved, but they are almost always looking for new members.   

Participating in industry PACs is also helpful.

 

 

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9 minutes ago, msmith said:

You would think that Congress has more pressing issues to deal with than this type of legislation. 

You misunderstand.  The most pressing issue for almost all members of Congress is getting re-elected.

I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.

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13 minutes ago, msmith said:

You would think that Congress has more pressing issues to deal with than this type of legislation. 

We are special.  Pensions/retirement is one of very few areas where there is some bi-partisan support.  And as @david rigby says, if you want to be re-elected, you have to show you are doing something, right?

 

 

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