Neese: SECURE Act a Watershed Moment

Speaking at a Jan. 26 session of the NTSA Summit in Denver, NTSA Executive Director Brent Neese outlined recent developments that have affected NTSA members and will figure prominently in 2020. 

Neese said that in his 25 years in the tax-exempt marketplace, there has been more change in the last few years than had taken place in decades. Calling the recently enacted SECURE Act “a watershed moment in many respects for our industry,” Neese said that he anticipates concerns over pricing, exchanges, and greater ease in comparing plans and enrolling in them. “I predict with fairly great certainty that this will bring new entrants into our market,” Neese added. “This is a time in which we are going to have to be vigilant in terms of the value proposition in the work that we do.”

State Activity

Turning to activity in the states, Neese noted that since 2012, 43 states have put in place or considered state-sponsored retirement plans. “There is zero doubt that we will continue see changes,” he added.

But state attention and action may not be a panacea, Neese indicated, observing the effect state laws can have on auto-enrollment. “Auto-enrollment has proven to be a very powerful driver of participation in the private sector,” he said, but told attendees that an especially important factor in participation in auto-enrollment in the 403(b) sector and the public sector being very low is state laws that prevent it.   

Neese also discussed the “plethora of regulatory proposals” concerning the standards of conduct and standards of care concerning how advisors and retirement plan professionals do their work and relate to clients. For instance, he said, the regulatory approach to such interactions “has moved from suitability to best interest.” Said Neese, “We’re going to be in an environment very soon in which there are going to be 51 flavors of fiduciary, 51 flavors of disclosures, 51 flavors of the documents that you have to provide to consumers, and the liabilities that creates for your practices.

“We are living in an environment of great change,” said Neese, remarking that regulations and laws “are written in pencil.” And he called attendees to action, saying, “The three-legged stool” of retirement financing – pensions, plans in which individuals can save money and Social Security – “is broken. It is. But we have the opportunity to fix that.”