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11/08/2018

Impact of 2018 Midterm Election on Retirement Plans

 The mid-term elections are over – Democrats have retaken the House and Republicans have enlarged their majority in the Senate. Here are three key takeaways on what this may mean for retirement legislation.

  1. It is very likely that Representative Richard Neal (D-MA) will be the Chairman of the House Ways and Means Committee in the next Congress. Congressman Neal is a longtime advocate of retirement legislation, including automatic IRA proposals, and more recently legislation that would ensure that almost every employee will have access to an employer-provided individual account retirement savings plan. He also has been supportive of bipartisan retirement proposals, including the Retirement Enhancement and Savings Act (“RESA”). 
  2. Senator Orrin Hatch's (R-UT) retirement opens up the chairmanship of the Senate Finance Committee. Senator Chuck Grassley (R-IA), who previously served as chairman and ranking member of the Committee could choose to return to serve as Chairman for the next two years. Senator Grassley has previously been a sponsor of comprehensive retirement legislation, including the Graham-Grassley legislation that formed the basis (along with the House Portman-Cardin bill) for the 2001 EGTRRA retirement reforms. If Senator Grassley chooses not to return, it is likely that Senator Mike Crapo (R-ID) will become Chairman of the Senate Finance Committee. 
  3. There remains broad, bipartisan support in Congress for RESA.  RESA would expand the availability of multiple employer plans, facilitate in-plan lifetime income options and disclosures, and other key changes. The bill was unanimously approved by the Senate Finance Committee in 2016 and the House companion bill has 85 cosponsors.  RESA has been bogged down by procedural and policy disagreements this year, though the House did recently pass the Family Savings Act (“FSA”). The FSA shares some common components with RESA, but also has major differences. It is likely that Congress will eventually take up RESA, either as proposed or with some modifications to reflect member priorities, either now during the “lame duck” session or in the new Congress. 

The 116th Congress presents a prime opportunity for the passage of retirement legislation. Once changes in the leadership of the relevant committees are determined, coupled with years of pent-up demand in the retirement industry, retirement legislation may be in the offing.