401(k) Specialist Issue 1 - 2021 - 18

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The SECURE Act, ESG, missing participants, private
equity, the fiduciary rule-there are A LOT
of issues with which the retirement plan industry
currently wrestles.
" It's going to be a very interesting year legislatively
and with the new administration, " Preston
Rutledge said matter-of-factly.
Specific to plans, he's bullish on ESG, proud of
electronic delivery, pro-PEP and private equity
and thinks lifetime income is a long time coming.
He wants more opportunity and options to combat
both low interest rates and high fees.
He jokingly refers to himself as a " swamp
creature " and lives and works within sight of
the Capitol, affording him a bird's-eye view
of the legislative and regulatory architecture
on which it rests. It's the reason now, with a
new administration, he's so sought after.
Arriving at The George Washington University
in the summer of 1980, Rutledge's
impressive Beltway notches include working
with top political players. A sample:
* As senior counsel to Republican
stalwart Sen. Orrin Hatch, R-Utah, he
drafted the Retirement Enhancement
and Savings Act (RESA), considered to
be the SECURE Act's precursor.
* Early on, he clerked on the United States
Court of Appeals for the Fifth Circuit,
recently famous for striking down the
Department of Labor's fiduciary rule.
* Speaking of the DOL, he capped his
most recent government tenure as
Assistant Secretary of Labor for the
Employee Benefits Security Administration
(EBSA).
We'd continue but for space. Rutledge's
hand in developing, if not actually writing,
important retirement plan regulations means
he's extremely valuable in determining
what's next.
It's a reason he formed the Rutledge
Policy Group, which provides " non-partiISSUE
1 2021 | 401kSpecialist.com
san, business-centric knowledge of current
legislative and regulatory trends and their
future implications in the areas of retirement
savings and employee benefits. "
Free from political constraints, he offered
practical answers and professional advice.
Yet mindful of D.C. diplomacy, he carefully
avoided criticizing, or even commenting on,
his regulatory peers; for example, politely
refusing to discuss anything SEC- or Reg
BI-related.
Everything else was on the table, and
he began with EBSA's recent guidance on
missing participants.
Missing Participants
The guidance isn't so much about finding
missing participants, he noted, rather best
practices for not losing them in the first
place.
" That's better than a more prescriptive
approach, " Rutledge said. " But the missing
participant issue will continue to evolve. "
Meaning a possible next step might involve
the Social Security Administration or
PBGC's help.
" The PBGC already has a missing
participant program for terminated 401(k)
plans. Perhaps they could expand it to plans
that are still up and running. There are
possible initiatives the administration could
implement around this, and there have been
legislative proposals, as well. "
Would missing participants be a primary
concern for Rep. Richard Neal, D-Mass.,
powerful chairman of House Ways and Means
and a retirement policy point person?
" He has a laser-like focus on the three
automatics: automatic retirement plans,
automatic enrollment, and automatic
escalation, " Rutledge countered. He
instead identified Senators Steve Daines,
R-Mont., and Elizabeth Warren, D-Mass.,
as major proponents of missing-participant
legislation, a more of a realistic possibility
" post-Georgia runoff. "
Missing participants were an EBSA priority
during his tenure. He bluntly told 2019
NAPA 401(k) Summit attendees that if
assets aren't available for workers when they
retire, what's the point?
" We do all this work to get plans set up
and people into them, " he said when asked
about the remarks. " We also do so much to
get them to accumulate assets. If we can't
find participants when they hit retirement
age, it's a faceplant, and I use that term deliberately.
It's something we don't want. "
Electronic Delivery
His second point directly connects to his
first. The rule to permit electronic delivery
of retirement plan disclosures was a
significant win for Rutledge, and part of his
EBSA legacy.
" It's well-received in the planning administration
community, " Rutledge beamed.
" Electronic disclosure received a kickstart in
the spring of 2020 because of the COVID
crisis, when EBSA allowed electronic disclosure
to be broadly used by both health
and retirement plans in light of the closure
of many businesses, including commercial
printers. "
Operations under the rule are " ramping
up and well underway " and will be utilized
more heavily in 2021.
" And I have every confidence we will
realize the estimated cost savings, " he
predicted, referencing the DOL's claim that
electronic delivery would save an estimated
$2.4 billion net cost over the next 10 years
for ERISA-covered retirement plans by
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401(k) Specialist Issue 1 - 2021

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