Title: The National Association of Government Defined Contribution Administrators, Inc. (NAGDCA)
1- The National Association of Government Defined
Contribution Administrators, Inc. (NAGDCA) - presents
- 2009 NAGDCAST 2
- Legislative Update of
- Defined Contribution Plans
2Program Introduction
- Mindy Harris
- Chief Financial OfficerMultnomah County, OR
3Many thanks to the following 2009 NAGDCAST series
sponsors
- Prudential
- TIAA-CREF
- Wells Fargo
- Great-West
- ICMA-RC
- ING
- Nationwide Retirement Solutions
4Continuing Education Credit
- Credits This NAGDCAST is worth 1.5 continuing
education credits to InFRE CRA and CRC designees!
- To Receive Credit
- InFRE designees must report attendance at a
NAGDCAST when they submit continuing education
with their annual certification renewal. - NAGDCA will provide InFRE with a final
participant list (not registrant list) so that
those seeking certification credits can be
verified. Individuals must be signed in
separately to receive continuing education
credits.
5- Dont forget the on-line NAGDCAST evaluation
NAGDCA needs your continued input about the - NAGDCAST series!
- The evaluation takes
- 2 minutes to complete!
- THANK YOU!
6Todays Speakers
- Susan White NAGDCAs Legislative Counsel
-
- Mildeen Worrell Tax Counsel, Majority House
Ways and Means Committee - Diann Howland, Vice President, Legislative
AffairsAmerican Benefits Council
7- Mildeen Worrell
- Tax Counsel, Majority House Ways and Means
Committee
8401(K) Plan Fees Disclosure
- Current State of Legislation
- Expected Legislative Movement
- Role of Ways and Means Committee
- Role of Senate Finance Committee, HELP
Committee - Relation to Governmental Plans
- GAO Study On Other DC Plans
9Automatic Enrollment IRAs
- Role of Obamas Administration
- Policy Concerns Expressed
- Possible Alternative Approaches
- Expansion of Savers Credit
- Possible Legislative Path
10ROTH IRAs For Governmental Workers
- Legislative Update on Federal Workers
- Impact for State and Local Government Workers
- Legislative Possibility
11Our Current System What Can Be Improved
- Workers Not Currently in the System
- Weaknesses of the System
- Strengths of the System
- Possible Reform Areas or Proposals
12- Diann Howland
- Vice President, Legislative AffairsAmerican
Benefits Council
13Overview
- Defined benefit pension plans
- Defined contribution plans
14Defined Benefit Pension Plans
- Worker, Retiree and Employer Relief Act
- Clarification of Pension Protection Act
- Technical Corrections
- 24-month smoothing of unexpected gains and losses
- Modification of transition rules to permit more
plans to take advantage of four-year transition
to 100 funding target - Look-back rule for benefit restrictions
- Relief for multiemployer plans
15Defined Benefit Pension Plans
- Many plan sponsors received relief, but the
funding emergency is on-going - Current status for 2009 funding obligations on
average still double obligations for 2008 (even
after taking into account changes made in the
2008 legislation) - Identified impact on companies
- Plan freezes
- Cuts in programs, initiatives
- Lay-offs
- Curtailed matching contributions
- Credit limitations
16Defined Benefit Pension Plans
- Overcoming the Challenges
- Three principles to guide solutions
- Do not undermine the Pension Protection Act
- Returning plans to fully funded status as soon as
possible - Protecting employees from reduction or
elimination of protected benefits
17Defined Contribution Plans Where Are We?
- Some Members have questioned whether the defined
contribution system ought to be scrapped - Most recent hearing in House Education and Labor
Committee examining 401(k) plan fees - More hearings expected in the House
- Requests for Information regarding target-date
fund investments - Numerous 401(k) related GAO reports underway
- DOL 401(k) fee disclosure regulatory projects
- White House memorandum restricting publication of
pending regulations, delay of effective date and
reopening of comment period - Administrations budget proposing enactment of
the Auto-IRA and expansion of the SAVERs Credit
18Defined Contribution Plans
- Key issues likely to be considered
- Coverage
- Adequacy
- Risk to participants
- Defaults
- Advice
- Cost
- To the government
- To participants
- Fiduciary duties
- Rremedies
- Fee disclosure
19Defined Contribution Plans
- Many of the Trade Groups are studying coverage
issues - American Benefits Council Paper Establishing
Value in the DC System - Defined contribution plans reach tens of millions
of workers and provide an important source of
retirement savings - Employers make significant contributions into
defined contribution plans - Employer sponsorship offers advantages to
employees - Defined contribution plan coverage and
participation rates have generally increased - Defined contribution plan rules promote benefit
fairness - 401(k) plans have evolved in ways that benefit
workers - Recent enhancements to the DC system are working
- World-At-Work / American Benefits Council Survey
- Consistent with other savings patterns, Americans
are generally still saving in their DC plans and,
in some cases, are increasing their
contributions plans
20Defined Contribution Plans
- Some key issues
- Support the voluntary retirement savings system
- Address coverage gaps via a multi-faceted
approach - One-size does not fit all
- Auto-IRA and expand the SAVERs Credit
- Maintain a tax structure that encourages employer
sponsorship of plans - Continue work on fee disclosure
- Keep features of plans that have worked well
- Other
21Summary
- Challenges
- Qualified plans
- Defined Benefit Pensions and Defined Contribution
Plans - Outlook for success
- Looking for common ground with groups with
disparate views - Education efforts
- Working with both House and Senate and the
Administration - Limitations of time and money
22- Susan White
- NAGDCAs Legislative Counsel
23Overview of NAGDCA Priorities
- Maintain Important Distinctions Between
Governmental Defined Contribution Plans -
- Support Transparent and Balanced Defined
Contribution Plans, Fees and Disclosure of Fees - Ensure Parity
- Maintain Exemption from Early withdrawal penalty
- Maximize Unused Flexible Account Dollars
24Overview of NAGDCA Priorities (cont.)
- Enactment of a Roth 457 Option
- Permit Non-Spousal Beneficiaries to Roll Assets
to 457 and 403(b) Plans - Extend the National Save for Retirement Week
Resolution - Increase population cap for Low Income Savers Tax
Credit
25110th Congress Legislative Overview
- 2010 Federal budget
- Appropriations legislation
- Retirement related legislation
26House Committees on Ways Means and Education
and Labor Hearings and bills
- NAGDCA Testimony
- Committee on Ways Means Legislation
- Committee on Education Labor Hearings
- Committee on Education Labor Bills
27National Save for Retirement Week (NS4RW)October
18-24, 2009
- 2008 Review
- House Resolution 1294
- Co-Sponsored by Representatives Allyson
Schwartz (D-PA) and Sam Johnson (R-TX) - Passed on Suspension Calendar on June 26, 2008
- Senate Resolution 601
- Cosponsored by Senators Kent Conrad (D-ND) and
- Gordon Smith (R-OR)
- Passed Without Objection on September 18, 2008
282009 Tax and Pension Outlook
- Tax Legislation
- Legislation Affecting Retirement Related Issues
29President Obama
- Retirement Agendas
- Social Security
30 31There will be a QA Session at the end of todays
presentation
- Live Written Questions Use the QA Panel
located on the lower-right of your screen.
- Live Verbal Questions Use the Raise Hand
function in the Participants Panel on the
upper-right of your screen. If you wish to ask a
verbal question, you must join the audio dial-in
via your phone.
32- Thanks for joining todays NAGDCAST!
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quick evaluation of todays event.