Our Future is Bright
NAGDCA is 36 years old and has grown to have members from 50 states, about 200 local governments and 150 industry organizations. Together, we have become the leading organization for public employer supplemental defined contribution retirement plans. Your board is hard at work on some pivotal projects to serve the membership and future-proof NAGDCA.
In preparation for the board’s biennial strategic planning retreat in June, we are working to gauge NAGDCA’s organizational structure and ascertain the needs of the membership. We want to envision the future and evaluate what needs to be done now to position NAGDCA to be excellent and relevant for years to come. We’ll be conducting a membership needs assessment in early May. I encourage both our plan sponsor and industry members to make your voices heard by participating in our survey.
As you may have read in my last update, we are developing an enhanced National Retirement Security Week campaign. When our member plans, in partnership with their retirement plan vendors, roll out a coordinated campaign with cohesive messages all across the country, we can amplify our voice and have more of an impact. Our campaign will appeal to plans outside of NAGDCA’s membership and we are looking forward to engaging them too. Stay tuned for more information about the campaign and how you can get involved.
The board has worked diligently to develop a new benchmarking service, Perspectives in Practice. In a nutshell, it will dramatically enrich the survey NAGDCA has done for many years. You’ll find more details in the related article in this newsletter.
Your board is doing progressive things and I couldn’t be more proud. I always want to hear about your ideas, hopes or frustrations……especially during this time when the future of NAGDCA is shining bright and we are working to make sure it stays that way. You can email me your thoughts at firstname.lastname@example.org
As I close, I feel like I am writing to friends because so many of you have helped me and been my support system during the 15 years I have been involved with NAGDCA. Wyoming has a better 457 Plan to offer its public employees due to NAGDCA and that is what it is all about!
Wyoming Retirement System
2015-16 NAGDCA President
Perspectives In Practice – A Benchmarking Initiative for Public Sector
Defined Contribution Plans
After much anticipation, NAGDCA has launched its new benchmarking services - Perspectives in Practice – A Benchmarking Initiative for Public Sector Defined Contribution Plans. Having good data has always been important to NAGDCA and its members. While we have a long history of conducting surveys, this new service will allow us to collect data in a more robust and meaningful way.
Key benefits of the project include the ability to use the data to understand trends and identify issues to better serve NAGDCA members, support our legislative efforts in Washington, D.C., and provide members the capability of benchmark their plans with peers in order to gain knowledge and improve the outcomes for their participants.
A webinar will be held on Tuesday, April 12 at 1 p.m. (ET) to provide more information about the benchmarking initiative and there will be time for Q&A. We encourage you to sign up here.
All government primary members should have received an email with a customized link to complete the survey. If you need to have it resent, please contact Tracy Tucker at email@example.com. Responses are due May 2 and we would love to have 100 percent participation from our government members. The more data we collect, the more meaningful the results will be.
NAGDCA Leadership and Media Awards Nominations Now Being Accepted
To nominate a government member for a NAGDCA Leadership Award, please click here. Leadership awards categories include: Participant Education/Effective Communication, Plan Design & Administration, National Retirement Security Week, Technology and Social Media, and Excellence in Governmental 403(b) Plans.
NAGDCA is also accepting nominations for the Media Recognition Award. This award recognizes a member of the media for outstanding coverage of pension and retirement issues in newspapers, magazines, newsletters or research reports. The 2016 award will be presented at NAGDCA’s Annual Conference in September.
All applications are due May 20.
Executive Board Visit to The Hill
NAGDCA’s Executive Board traveled to Washington, D.C. March 21-22. They met with key officials from the Departments of the Treasury and Labor as well as majority and minority tax counsel for the House Committee on Ways and Means, majority tax counsel for the Senate Committee on Finance, and staff for Senators Cardin (D-MD) and Enzi (R-WY) and Representatives Neal (D-MA) and Larson (D-CT).
At the meetings, the Executive Board discussed NAGDCA’s priorities including the preferred tax treatment of retirement savings, National Retirement Security Week (October 16-22), the elimination of the first day of the month requirement, exempting Roth assets from required minimum distribution provisions, allowing rollovers from Roth IRA’s to governmental defined contribution plans, non-spousal beneficiary IRAs increasing eligibility for the low income savers tax credit and including the savers credit on the 1040EZ form. NAGDCA board members also discussed other issues that are covered below including the Department of Labor fiduciary rule, Department of the Treasury charter school rule, and tax reform.
NAGDCA Board of Directors visited Capitol Hill March 21-22 to meet with key legislators and their staff regarding NAGDCA legislative priorities.
NAGDCA Board of Directors met with Department of Labor Assistant Secretary Phyllis Borzi to discuss NAGDCA legislative priorities.
Arthur N. Caple Scholarship
Applications for the 2016 scholarship program are currently being accepted. The deadline
to apply is May 2.
The ANC Foundation, in partnership with the International Foundation for Retirement Education (InFRE), developed the criteria for the scholarship. To be considered, applicants must be enrolled as a full-time student at a university or college, be a junior or senior, be enrolled to continue university studies for the following semester, and be a U.S. citizen.
The scholarships commemorate the lifework of Arthur N. Caple, former Executive Director of the State of Maryland Supplemental Retirement Plans and NAGDCA Past President, who passed away in 2004.
For additional information about the scholarship program, please visit the ANC Foundation.
Mark Your Calendar:
1–2 p.m. (ET)
Industry Roundtable Meeting
The Liaison Capitol Hill
Webcast: Legislative Update
12–1 p.m. (ET)
Support the ANC Foundation
Industry Members, The Executive Board of the National Association of Government Defined Contribution Administrators (NAGDCA) and the Arthur N. Caple Foundation (ANC Foundation) are asking for your support of the Foundation in 2016. As you know, the scholarship to honor Art was established in 2006 and the Foundation was established in 2006 as an educational foundation to further advance knowledge in the field of public sector retirement security and it commemorates the lifework of Arthur N. Caple, CRAsm, CRC®, who was a national leader in the field of public-sector retirement security.
Once again this year, the ANC Foundation will be awarding scholarships to students pursuing a career in financial planning and who show a commitment to the industry. There are several ways you can support the Foundation:
- Make an annual gift. A gift as an individual or a company gift is welcome and appreciated. All donations are tax deductible.
- Sign up to be a matching donor. During the NAGDCA Annual Conference, we will be encouraging attendees to donate to the ANC Foundation. Companies who sign up to participate in the program agree to match, up to their pledged amount, the donations pledged/received by both public and private sector conference attendees from Sunday, September 18 through Wednesday, September 21. After the conference, we will notify each private-sector donor of its total match contribution. All donations are tax deductible.
- Participate in the NAGDCA - Theresa Cruz Myers Fun Run/Walk at the Annual Conference to support the ANC Foundation. This is the second year for the event.
All contributions are welcome. Please visit the Caple Foundation to learn more or to
make a contribution.
The Administration released its proposed budget in early February and there are few proposals that impact retirement plans. Following the Administration budget proposal, the House and Senate Committees on the Budget meet to set a Congressional blueprint for what the following year’s appropriations should be. The House Committee on the Budget has released a draft budget, but since the House Freedom Caucus, a coalition of about 40 very conservative House members, has announced they will oppose the budget, it is unlikely that the House will pass a budget resolution. Members of the minority party traditionally do not vote for the budget and Democrats, plus the House Freedom Caucus, do not leave Republican leadership enough votes to pass a budget. The Senate Committee on the Budget has not yet released a budget, but they are expected to do so in the coming weeks.
Of importance to NAGDCA, the Administration proposed treating Roth IRAs like other retirement plans. NAGDCA has supported exempting other plans from RMDs so there is equality, but as this proposal accomplishes what NAGDCA’s priority of equality is, NAGDCA is inclined to support it. The Administration also proposed exempting retirement plans with balances under $100,000 from the RMD rules.
Budget resolutions are not signed by the president and are not laws. However, they do tell other committees what kind of funding should be expected and provides a blueprint to the coming year.
Presidential primaries are now in full swing and while Hillary Clinton and Donald Trump are leading their parties in pledged delegates, it remains possible that neither of them will reach the majority necessary to secure the party nominations before the conventions in July. Congressional leaders are also taking the upcoming elections into account and are not scheduling any difficult votes in order to protect vulnerable members.
Department of Labor Proposed Rule
The Department of Labor (DOL) released their final fiduciary rule on April 6. DOL is expecting a lawsuit that may delay implementation of the rule, but is confident it will be upheld in court. The goal of this rule is to ensure that fiduciaries put the best interests of their clients first however, there are concerns that smaller investors may lose access to retirement advice. We are in the process of analyzing the rule and will write a special report on the rule for the membership.
There is legislation in Congress to block the rule, but in the recent Executive Board meetings in Washington, D.C., Republican staff were pessimistic about the chances of it passing both chambers of Congress. Even if legislation were to pass, President Obama would surely issue
Plans administered by NAGDCA members will not be directly impacted by the proposed rules. The proposed rules only cover ERISA plans. However, the broad effect of the rules over the thousands of ERISA covered defined contribution plans and millions of ERISA covered participants, effectively alters the defined contribution business to de facto affect governmental plans as well.
Also, the Securities and Exchange Commission is looking at the issue. If they choose to promulgate rules in the future, governmental plans would be bound by them.
Department of the Treasury Proposed Rule
The Department of the Treasury has been discussing a proposed rule on whether charter schools are considered government plans. These discussions originally began when Treasury was looking to define governmental plans. Staff at Treasury mentioned that the Department was currently working on the rule, but were unwilling to share any other details.
Due to upcoming elections, it is unlikely that any tax reform legislation will move forward this year. This has not stopped committees from holding hearings and these hearings may be laying the groundwork for tax reform to move forward in 2017.
The Committee on Ways & Means recently held a hearing on corporate taxes. Three members were witnesses and discussed their bills with the committee. At this time no further hearings have been scheduled, but it is likely that additional hearings will be held this year and these may cover pensions and retirement.
Two years ago, Chairman David Camp (R-MI) put out a tax reform proposal that included elimination of the 10 percent excise tax exemption for governmental 457 plans. Chairman Camp has since retired from Congress, but his proposals may be used as a basis for tax reform. This is especially true for provisions like elimination of the 10 percent excise tax exemption as it raises revenue. It is unclear how many of Chairman Camp’s proposals would be included in any future tax reform legislation, but other members may use the proposals to pay for their legislation.