EBSA nominee’s deep industry knowledge likely to spur impactful retirement regulations
Washington, D.C., insider Preston Rutledge’s nomination to be the next assistant secretary of labor for the Department of Labor’s Employee Benefits Security Administration would bring a familiar face to that role.
Industry experts believe his extensive understanding of legislative and regulatory processes, along with a fair-minded reputation, could help advance causes that are top of mind for employee benefit decision-makers. One such example is boosting the nation’s abysmal savings rate.
Brokers and advisers can rest assured that “someone who really understands the industry and retirement would be at the helm of crafting what the next generation of that role is going to look like,” says Brian Graff, CEO of the American Retirement Association.
His deep benefits background and institutional knowledge will prove “invaluable in getting some things done” at the EBSA, Graff says. As such, Graff anticipates Rutledge would find ways to facilitate multiple employer plans (MEPs) and make it easier for small businesses to sponsor retirement plans.
“Preston has a long, storied background in the benefits space,” adds Christopher Condeluci, a principal with CC Law & Policy and former counsel to the Senate Finance Committee. He referenced significant experience with MEPPs, defined benefit pension relief, defined contribution plan fees and the consideration of Roth IRA treatment for all benefits.
Rutledge has “a good feel for what protections are needed for savers and what incentives should be out there for people to save,” says Bill Sweetnam, legislative and technical director of the Employers Council on Flexible Compensation. His benefits background offers “a level of knowledge that a whole lot of people don’t have that could help develop the appropriate policy results,” he adds.
Tim Rouse, executive director of the SPARK Institute, looks forward to hearing Rutledge’s ideas for improving retirement coverage, as well as supporting SPARK’s quest to allow an e-delivery default option for materials that recordkeepers currently snail mail. His group’s research and educational efforts help shape national retirement policy.
Also see: “Trump nominated Rutledge to key EBSA role.”
A broad knowledge of the Affordable Care Act’s impact on employers also could help Rutledge implement current rules on the books and contribute to any policy changes that may be pondered, Condeluci adds.
One looming question mark is Rutledge’s view of the fiduciary rule, which Rouse suspects lawmakers would be eager to learn during confirmation hearings. However, Condeluci expects any decisions regarding the nature of such a politically charged issue to come from the White House or Labor Secretary Alexander Acosta. “We all have our thoughts on which way things should go, but Preston’s a guy who listens and takes things into account,” he says.
Graff expects Rutledge and Acosta would work well together, describing them as “two smart lawyers” with a comparable approach to regulations within the boundaries of the Administrative Procedure Act. “They respect the rule of law, and they want to approach things the right way, using the appropriate regulatory process,” he adds.
Opposite of Borzi?
If confirmed, Rutledge would replace Obama-appointee Phyllis Borzi, who left that position in January. While Condeluci notes that they have similar backgrounds, he says the chief difference is Rutledge didn’t spend time in the private sector practicing law like Borzi did during parts of her career.
She also had an academic bent and wariness of services being provided in the retirement and employee benefits space during her long career, Sweetnam says, whereas Rutledge doesn’t possess any “reflexive sense of distrust.”
Still, “he’s no patsy for the industry,” he says. “He spent the past 15 years in government; he didn't spend the past 15 years working for a mutual fund company.” As a Republican, Graff believes Rutledge is “going to be more cautious about regulations,” particularly those that create an unfavorable environment for retirement plans.
Unlike nominees for other positions in the Trump administration, Rutledge isn’t “a divisive figure or lightning rod” of controversy, according to Condeluci. He has worked on retirement-related policy issues in both Republican and Democratic administrations and is expected to leverage the institutional knowledge of Labor Department staffers with a thoughtful approach.
“The climate in D.C. is one that really is starving for some bipartisan efforts,” Rouse says, noting how Rutledge could help achieve that “worthwhile goal.”