It follows Donald Trump’s stunning victory this week and the election returns US Senate by the Republican Party, retirement and tax policy could have a major impact following the transition of power, according to National Association of Plan Advisors ( HERE ).
Most of the political The US House of Representatives It’s unclear, but if the GOP retakes control there, the Republican Party will have control over the executive and legislative branches of government, as well as the judicial branch, possibly for decades.
Regarding the implications of retirement policy, NAPA said the immediate changes ranged from incoming leadership to powerful Senate committees. The chairs of these committees have the freedom to choose the legislative agenda of Congress. Sen. Mike Crapo (R-Idaho) is ready to take control of the Senate Finance Committee that oversees “the Internal Revenue Code, Social Security, tax and trade issues, and tax issues related to health care, among others,” wrote NAPA.
The Senate Committee on Health, Education, Labor and Pensions (USIZO), currently chaired by Sen. Bernie Sanders (Vt.), likely to be assisted by Sen. Bill Cassidy (R-La.).
“The Board of Trustees has primary jurisdiction over private retirement plans and the Pension Benefit Guaranty Corporation through ERISA (Employee Retirement Income Security Act),” explains NAPA. “But it does work with the Finance Committee, as it relates to tax policy and ERISA issues.”
Crapo has a history of bipartisanship on retirement issues, including his role in passing the SECURE 2.0 legislation alongside Senate Democrats. He also helped pass the Senior Securities Act “to increase the protection of senior investors from exploitation and abuse,” NAPA said.
Cassidy is also a supporter of “collective investment trusts (CITs) in 403(b) plans, and legislation to establish a safe harbor for automatic re-enrollment,” NAPA said. Cassidy also sponsored legislation that would lower the minimum age for participation in “ERISA-covered defined contribution (DC) plans from 21 to 18.” He is against environmental, social and governance (ESG) investing.
in Mortgage Bankers Association (MBA)’s Annual Convention and Expo in Denver last month, MBA CEO Bill Killmer explained that there will be a “big tax bowl” debate in Congress regarding the expiring Tax Cuts and Jobs Act. The TCJA is one of Trump’s signature pieces of legislation during his first term in office.
The debate over whether to reauthorize or extend the law was thought to be particularly heated if Democrats retain congressional officials and hold on to The White Housebut the odds that none of this will happen have increased dramatically since Election Day.
“The TCJA made some changes to the retirement tax system, but the roughly $1.5 trillion tax reform law brought significant tax relief to corporations, pass-through companies and individual filers, and simplified the system in many ways,” NAPA said.
But the upcoming budget debate is still expected to be revived, considering that the majority in the legislative branch will remain small and the budget reconciliation process will continue until now.
“During the campaign, President Trump discussed eliminating the Social Security benefits tax and tip tax, and using cost-based taxes to reduce additional taxes. That will be part of the upcoming budget debate,” said NAPA.
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