Opposition to Retirement Reform

Retirement reform ranks low on the Republican agenda in the 2010 mid-term election. Meanwhile, the financial services industry resists regulation.

Republicans Are Good for Retirement Reform?

James Delaplane, a partner at the Washington law firm of Davis & Harman LLP, presented a keynote address at Pensions & Investments’ West Coast Defined Contribution Conference in San Francisco, in October of 2010.

Delaplane predicted good things for the retirement industry would gain if Republicans took control of the House of Representatives in the midterm elections.

Is that because Republicans oppose the kind of retirement reform that would help the American worker?

More about Republicans and Retirement Reform

One reason why the retirement industry might be better off is that Republican influence would forestall most legislative action on retirement reform.

“Retirement is not high on the Republicans’ agenda,” said Mr. Delaplane, noting that the GOP’s recent “Pledge to America” contained only a passing reference to Social Security but no other comments on — or prescriptions for — retirement investing and savings issues.

A GOP majority in the House, Delaplane added, would also protect tax incentives now in place for retirement plans.

Resisting Government Regulation

On another front, the retirement industry is concerned about regulation, more regulation, and more regulation, specifically any regulatory grip on the financial industry. Financial advisers and service providers are trying to avert the possibility of coming under greater regulation by an existing or new government agency.

A retirement reform bill passed by the House in December 2009 included language by which the new consumer financial protection agency (CFPA) would be given regulatory powers over unregulated retirement plan providers.

Even if the CFPA never came to fruition, the retirement industry can expect more regulation under new Labor Department or Treasury Department regulations. The Senate was working on a version of a bill that would give the Federal Government unprecedented authority over an array of financial services entities.

As a result of this concern, the American Society of Pension Professionals and Actuaries (ASPPA) has been lobbying senators to exclude from financial regulations service providers and advisers serving the retirement plan market.

Topic: Fixing the Retirement System Subtopics: The American Retirement System • What Is Retirement Age? • Pension Retirement Plan Reform • Lifetime Annuities • 401k Annuities • 401k Annuities: A Proposal from TIAA-CREF• 401k Annuities: Popular Support • Cash Balance Accounts • White House Reform • Obama Retirement Reform • Social Security Statements as a Model • Models from Australia, New Zealand, and Canada • What the Public Wants • Multi-Employer Plans • Automatic 401k • Automatic IRA • Tom Harkin • Herb Kohl • Other Advocates of Pension Reform • Opposition to Reform