Ironically, while some see lowering the savings limit as politically palatable because it impacts only a small segment of the population, that same fact reduces the effect of such a policy shift.
Tag "Trump"
As long as the fiduciary ball remains in the Executive Branch’s court, it’s easy to predict what will happen. That doesn’t mean, however, that we won’t see some surprises coming from the Legislative Branch.
I do not underestimate the ability of the plaintiff’s bar to come up with novel and clever arguments, but for the reasons set forth in the white paper I do not believe that they can construct a viable theory.
A lot may depend on who Trump selects to head up the DOL in his second term. If we start seeing familiar faces, that might indicate the department’s direction.
Laffer postulated that tax receipts might be increased by reductions in the tax rate because such reductions would bring people out of the underground economy and also reduce the usage of tax shelters. This advice was implemented in President Ronald Reagan’s “Reaganomics,” and it worked to increase tax revenues.
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This broader definition of fiduciary may impose a potential hardship on a segment of the retirement industry that has been trying hard to gain a foothold in plan infrastructure.
The Biden Rule, like the Trump Rule, does not encourage or discourage the use of ESG criteria when selecting investments. This allows fiduciaries to either adopt ESG principles or ignore them.
Should the platform offer ESG doesn’t necessarily mean good news for the 401k plan sponsor. Including ESG funds might introduce other risks.
Although the Rule appears to be directed primarily at service providers, plan sponsors still have a fiduciary duty to monitor plan compliance, and that includes complying with the demands of this new rule.
