Legislative updates

The IRS issued Notice 2022-33 which extends the deadline for amendments to retirement plans and Individual Retirement Arrangements (IRAs) to adopt provisions enacted under the SECURE Act, the Miners Act, and some provisions under the CARES Act. The Notice provides that qualified plans, IRAs, and non-governmental 403(b) plans must be amended to adopt applicable provisions of each act no later than December 31, 2025. The previous deadline for such amendments under Notice 2020-68 and Notice 2020-86 was December 31, 2022.

Senators Debbie Stabenow (D-MI), and John Boozman (R-AR), along with Senators Cory Booker (D-NJ) and John Thune (R-SD), have introduced the “Digital Commodities Consumer Protection Act.” According to a press release, the proposal would give the Commodity Futures Trading Commission (CFTC) new tools and authorities to regulate “digital commodities”—which would include Bitcoin and Ether. The bill sponsors serve on the Senate Committee on Agriculture, Nutrition & Forestry, which has oversight of the CFTC which regulates commodities markets.

A previous proposal by Senators Cynthia Lummis (R-WY) and Kirsten Gillibrand (D-NY) was announced in June.

Senator Mike Braun (R-IN) and seven republican co-sponsors have introduced S. 4613, the Maximize Americans’ Retirement Security Act. The bill would amend ERISA as follows:

• Require plan fiduciaries to select investments solely on pecuniary factors
• Require participant notification of an explanation of why pecuniary factors were not sufficient to select the investment and how non-pecuniary factors are consistent with the interests of participants if a fiduciary cannot distinguish between investments on pecuniary factors alone
• Define pecuniary factors as any factors that a fiduciary prudently determines is expected to have a material effect on the risk of return of an investment

Department of Labor guidance regarding what is “pecuniary” and the extent to which non-pecuniary factors can be considered when selecting investments has changed throughout the years. The proposal was referred to the Senate Committee on Health, Education, Labor, and Pensions.

July 19, 2022 - Representative Warren Davidson (R-OH) has introduced HR 8331, a bill that would provide for a suspension of required minimum distributions (RMDs) from retirement plans and IRAs for the 2022 calendar year.

The Securities and Exchange Commission (SEC) has adopted amendments that rescind two rules applicable to proxy voting advice businesses (PVABs) that were adopted in 2020. The 2020 rule imposed conditions on the availability of two exemptions from the proxy rules’ information and filing requirements. Those conditions require that

• Registrants that are the subject of proxy voting advice have such advice made available to them in a timely manner, and
• PVAB clients are provided with a means of becoming aware of any written responses by registrants to proxy voting advice

The Pension Benefit Guaranty Corporation (PBGC) has released a final rule outlining terms for underfunded multiemployer plans seeking special financial assistance (SFA) under the American Rescue Plan (ARP) Act of 2021. ARP allows certain financially troubled multiemployer plans to apply for special financial assistance in accordance with rules developed by PBGC. The rule is scheduled to be published on July 8, 2022.

Congressman Patrick McHenry (R-NC) has released a discussion draft of legislation to modernize financial privacy laws and give consumers more control over how their personal information is collected and utilized. A press release provides the following highlights of the proposal

• Modernizes the Gramm-Leach-Bliley Act to align consumer protections with financial system innovation
• Empowers consumers to understand how personal information is being collected and used by a service provider when they agree to a service provider’s privacy policy, and ensures consumers have the right to terminate collection of their data or request deletion of their data
• Directs entities to disclose to consumers why they are collecting certain data along with the ability to opt out of the data collection—and to use data only for its stated purpose
• Improves transparency by requiring privacy terms and conditions in consumer disclosures to be easily understandable
• Provides a national standard that would preempt state privacy laws to provide consistency across the nation with respect to collection and use of personal information

Congressman Lloyd Smucker (R-PA) has introduced H.R. 8128, a bill to expand the allowable education expenses available for use from 529 education savings accounts. The bill would allow industry recognized apprenticeship programs registered and certified by an eligible Standards Recognition Entity as qualified education expenses. These programs would be in addition to existing apprenticeship programs registered and certified with the Secretary of Labor that qualify as higher education expenses.

The definition of qualified education expense would also be further expanded to include expenses related to a “career and technical education program” (as defined by the Carl D. Perkins Career and Technical Education Act of 2006) or a “career pathway” (as defined by the Workforce Innovation and Opportunity Act).

The Enhancing American Retirement Now (EARN) Act, which cleared the Senate Finance Committee and heads to the full Senate for consideration, includes a proposal by Senator Bob Casey (D-PA) to modify the “eligible individual” definition for purposes of a qualified ABLE program. Under the proposal, an individual may be an eligible individual if entitled to benefits based on blindness or disability, and such blindness or disability occurred before the date on which the individual attains the age of 46 (the current age is 26). It is estimated that the change in age would allow over 6 million additional people with disabilities to save with ABLE accounts.

The Senate Finance Committee conducted a hearing today to consider the Enhancing American Retirement Now (EARN) Act. The bill was unanimously approved out of committee with one minor amendment. While text of the bill has not yet been made available, details of a summary released by the committee were previously announced. During the hearing, several other amendments were discussed and, while not included, many had broad support and could be included in the final full Senate version of the bill.