Episode 74: Scott Eckel

Revamping Retirement Episode 74

Please note: This is an AI generated transcription. There may be slight grammatical errors, spelling errors and/or misinterpretation of words.

Intro: [00:00:00] Covering the ever-evolving retirement plan landscape to help identify the biggest opportunities for plan sponsors, CAPTRUST presents Revamping Retirement.

Jennifer Doss: Welcome back everyone to another episode of revamping retirement. I’m Jennifer Doss and I’m joined by my co host today, Pete Ruffell. Pete, how are you?

Peter Ruffel: doing well, Jennifer, how are you? I’m doing well.

Jennifer Doss: So I don’t know if you listened, but last month, Audrey and Matt threw down the gauntlet. I think they said something about they were the best podcast hosts or something similar like that. So I really thought this month, you and I, we could bring the fire, they covered social media influencers and [00:01:00] finance, but. Pete, you and I today, we’re going to cover governmental affairs. Okay, so take that Pete and Audrey. I’m kidding. Of course, this is a very important topic to keep up with. particularly as a new administration comes in, regulation can change our industry very quickly.

take no better example than tax revenue act of 1978, which created subsection K of the 401k section of the internal revenue code, which we all lovingly refer to now as the 401k plan. And At the time, the government said that the impact of subsection K on tax revenue would be negligible, which is one of my favorite lines of all time, considering I now work in the 8 trillion dollar 401(k) market.

very good, ability to see the future there. I talked about this at our January podcast, I think, but there’s just so much uncertainty this year, extending the 2017 tax cuts, cutting budgets. Retirement can unfortunately sometimes get mixed into that conversation. In addition to what are the changes that we’re seeing at the SEC or the [00:02:00] DOL.

So today we have a very special guest. Scott Eckel from Charles Schwab Scott is the Managing Director of Legislative and Regulatory Affairs for Schwab and he spends his days in Washington, D. C. speaking with members of Congress on investment issues. So today, Scott is going to provide us with some insight. into how things work in Washington, what might be in store for Congress and what topics could be up for discussion.

But first, Scott, I’ll let you introduce yourself

Scott Eckel: Sure. thank you both. And first of all, just thanks for having me. It’s, this is fun to, to be with you today. It’s my first ever podcast,cut me a little slack, but hopefully, uh,as you said, bring a little interestingness to this today. as you mentioned, I am with.

the Schwab’s Office of Legislative and Regulatory Affairs. And we are a little, four- or five-person outpost here in Washington, D. C., which is where I’m based. And my primary job is to track what’s going on in Congress, the SEC, Department of Labor, et [00:03:00] cetera, what policy proposals are being put forth.

And then as policy proposals are put forth, the impact. Our company and our clients, then I’ll then engage with policymakers and give Schwab’s point of view on said proposal. And so that is a little bit of a long way of saying I am a financial services lobbyist, which is maybe like the lowest form of swamp creature in the D.

C. swamp. But that being said, I sleep pretty well at night. and part of that I think is, you know, I work for Schwab, and I’m proud of the ability we’ve had to help democratize investing over the 51 years or so that our firm’s been around. And because we represent, roughly 35 million investors, Main Street investors at the end of the day.

I think I’m, I’m able put my white hat on when I go in and meet with policy makers and they want to hear what we have to say about an issue because of who we represent and our widespread client base around the country.

Peter Ruffel: Yeah, I think everyone does have some idea of what lobbying is, and obviously have a sense of the purpose of it, but for the sake of humanizing the importance of your work, like [00:04:00] you saying, putting that white hat on, could you highlight a few examples of policy that maybe Schwab is champion for or maybe against in the past few years?

Thank you. Sure

Scott Eckel: Schwab has become a pretty diversified financial institution over the years, too. so for a long time, a lot of our issues were, and still are, around what we call equity market structure issues. So it gets in the weeds of the rules coming out of the SEC about, how we have to route our clients orders through our equity markets and things like that.

So we’ve You know, there’s a variety of aspects that we’ve weighed in on over the years. and even as recently as the last couple of years under chairman Gensler at the sec, he put forward four really broad proposals on what we call equity market structure. A couple were okay. A couple we actually thought would do more harm than good to your average retail.

We call it retail investors, mom and pop investors around the country who we represent. And beyond that, We have a bank. Schwab has a bank. Not many people know about it, but it’s actually [00:05:00] something like the ninth or tenth largest bank in the country. It’s a little different than most banks in that we don’t have branches, and we’re largely what we call a retail custodial bank.

So if you’ve got a Schwab brokerage account and we’re custodying your funds, and you’ve got, a 50, 000 account, 40, 000 is invested in stocks and ETFs. There’s 10, 000 sitting in cash waiting to be invested. That cash component gets what we call swept into a Schwab bank account every night.

You get interest, you get FDIC insurance, and then it’s ready to be invested the next day. the regulation of those deposits have always fallen under what’s called brokered deposits at the FDIC, which is a subcategory of deposits. And we weighed in heavily several years ago on how to characterize those deposits, how to treat them, for instance, and when they did a major reform of broker deposits.

The FDIC. We’ve certainly, weighed in on, things like e delivery, where we support going to a default e delivery option for our customers and what they receive as far as regulatory documents from the SEC. tax items as well. [00:06:00] But generally speaking, we’re always coming in from the point of view of we represent retail investors around the country.

And it can take on a broad, scope of subjects at the end of the day, but that’s the glue that keeps it together.

Peter Ruffel: When I was doing a little bit of, investigation on this, just lobbying in general is so fascinating. There’s a website that gave me some insights that the securities and investments industry is the eighth largest lobbying industry amongst many of the major industries around the country, which I thought was fascinating.

And also the fact that, you know, It seems that lobbying spending is now hitting an all -time high. I think 2024 was a new record high. It seemed to be plateauing for a bit and it’s, picked back up in the past four years. would you be able to give us a little bit of sense of just the lobbying ecosystem and maybe a sense of the dynamics on Capitol Hill if anything has changed recently that’s led to that increase in spending?

Yeah.

Scott Eckel: it’s a good question, and I don’t know if I have the definitive answer as to what’s going on there. A couple things come to mind. first, we did actually have a fairly high amount of inflation, [00:07:00] for a couple years, so it might be a little bit of that going on, that you had some inflation that just drove every cost of everything, including lobbying up.

the crypto industry engaged in a real meaningful way in the last couple of years. and even beyond lobbying per se, they actually got involved in campaign spending as well. And I don’t know if that was enough to, move the needle. meaningfully, but they certainly are a new entrant and a significant entrant into the lobbying world.

and then another idea that comes to mind is that frankly, under the Biden administration, at least not just in our world, but certainly in our world, you saw a lot of pretty big, proposed regulations. And so a lot of lobbying is, pushing back to one degree or another, educating policymakers on, why we think Certain regulations might again have a negative impact on your client base, and it’s not just Schwab That’s just a securities industry.

That’s across the whole, breadth of industries And so when you have more proposed regulations, we’d have a [00:08:00] natural Result of that might be potentially more lobbying

Jennifer Doss: I think it’s an interesting concept that you just think about the number of topics and the breadth of topics that go through Congress that they deal with and just things that they can’t possibly be experts on at all times. And so who they’re getting their information from can matter, right?

The perspective that you have, like I said, versus not to pick on them, but the crypto industry might be very different.

Scott Eckel: Absolutely. I came from Capitol Hill. I’ve been at Schwab now 13 years in this role. before that. I worked on Capitol Hill and financial services, regulatory policy, both on the Senate side at first, and then on the house side during what became sort of Dodd Frank.

and as a Capitol Hill staffer, A big part of your job is you meet with people all different points of view. but to be a good staffer, you have to figure out, what sources might be more trustworthy than others and just distill everything you’re hearing down to a summary of then what you’ll [00:09:00] pass on as far as policy recommendations to the member of Congress that you’re working for.

So yeah, I view what we do is very educational, actually at the end of the day, because as you mentioned, every member of Congress is on several committees. they’ve got a thousand different things coming across their desk every day. They can’t be expected to be, expert in the weeds on all these different issues, especially in financial services, which tends to get in the weeds a little bit.

My role I see is educational and trying to provide, an honest assessment from Main Street investors point of view of how these proposals impact, our clients.

Jennifer Doss: shifting a little bit, I think, to maybe some of what you see going forward, your expectations for this new administration that we’re coming into, you know, what the focal points are going to be there, I guess, give us a sense of how you might characterize, um, you know, what we can expect

Scott Eckel: Sure. obviously, we are in Trump, 2. 0 era right now. And, President Trump is coming off, for him, a solid electoral result, he swept all seven swing states, [00:10:00] won the popular vote by around 2 million votes. And so he is at, the height of his popularity right now and more popular than he ever was during his first term.

And so he’s trying to seize on that, so he’s hitting the ground running. There’s a couple big themes, big issues that he campaigned on that you’re gonna see, we keep coming back to here in the next several weeks and months. One is tariffs. we may see some implemented on potentially Canada, Mexico, and additional ones on China.

Scott Eckel: He doesn’t really need Congress, too much on tariffs, so he’s been able to move forward to the extent he wants to mostly on his own on that other big theme coming out of the election, immigration or the border, et cetera. he again hit the ground running with. he’s going to have several executive orders right out of the chute in this area.

but he will need Congress, at least for part of that issue set, and that he will need funding, to, hire more border agents, funding to have additional detention beds, things along those lines. and then third, [00:11:00] a big issue that we’re going to see a lot of activity on, and this is where Congress needs to mostly act, is the area of taxes.

in Trump’s first term, we had something called the Tax Cuts and Jobs Act of 2017, pretty significant tax reform legislation. you don’t get big tax bills all the time. It’s, every 8, 10, 15 years, you usually get a big bite of the apple, these types of things. A lot of the provisions, particularly the ones that impact individual, taxpayers, such as lower individual tax rates, higher standard deduction, higher amount exempted under your state tax.

These are just some of the provisions are all expiring at the end of 2025. And so if Congress does nothing, before the end of this year, 62 percent of American, families will see higher taxes next year.

So either way, you were going to see a major tax effort this year. And that’s going to be a major focus of Congress here in the next few [00:12:00] months.

Jennifer Doss: Gotcha. And, the way I understand it. we’ve got some pretty tight Republican majorities, right in the House and the Senate. And that 3rd thing you just mentioned is probably the closest tied to, you know, our retirement plan listeners and, and what would be important to them because, as I mentioned at the beginning.

Sometimes retirement gets, gets lumped in there. I mean, it actually, it’s deferred tax revenue. And so it does get lumped into that conversation sometimes. Um, you know, how do you expect, I guess, those margins, in the house and the Senate?to manifest itself in policymaking, um, and through your lobbying efforts?

Scott Eckel: The president came in with a really strong electoral mandate I think you could say the Senate to some degree you see his coattails there. Republicans picked up four net seats in November. They went from a small majority.

They had 49 seats out of 100 last Congress. Now they have 53. So they’ve got a little bit of a majority to work with on the Senate side. The [00:13:00] House, was a little different in that you recall, even in the last Congress, when Republicans quote unquote controlled the House or the majority party in the House, it was a very small majority.

And they obviously, it was well documented how much trouble they had getting stuff through the House. from the very beginning, it took 15 votes for McCarthy to actually gain the speakership. And then he was bounced out, unceremoniously about 10 months later, and they just had difficulty passing even sort of basic stuff out of the house all through last Congress.

Okay, now fast forward to this Congress, there’s actually a net. One, the less Republican in this Congress, Democrats picked up a seat in the House. And so that majority was down to three votes coming into this Congress. Matt Gaetz, the, short term nominee for attorney general decided to resign and didn’t come back this Congress.

So now you’re down to two vote majority. And two members of the House, Republican caucus either have already moved to the Trump administration or will be shortly. So you’re getting down [00:14:00] to one or even two vote majority for the House, Republican, majority there. you can’t get any tighter than that.

and it makes every single of those. 218 votes that they have is the majority maker. so to your question of are there particular members you lob?? every member of those 218 has The singular ability to take down a piece of legislation. that’s a pretty tough dynamic. And while, I think, the high level, narrative is Republican swept to power in November with the white house, the Senate and the house.

it’s that, that House in particular is very bare majority, and it’s going to be very difficult to wrangle those votes, throughout, this Congress. And it’s, made even more difficult in some ways in that President Trump, in his eight, ten years on the national stage,stage has dramatically remade the Republican party and something that might’ve taken 30 or 40 years to evolve over time as to what it means to be a Republican voter has sped up [00:15:00] quite a bit.

And so we’ve had, a dramatic reshaping of the Republican electorate in the last few years. So you’ve now set up. This, it’s not as homogeneous as it was in the past. Like this is your standard Republican conservative voter and what their top button issues are and which way they’re going to be on.

now, you’ve got all these divides within the Republican caucus, you know, big strong foreign policy versus the more isolationist wing that has been more ascended in the party more recently.

You’ve got tax cutters versus budget cutters, free traders versus guys who are pro tariff. And so my point is running through all this is that it makes it even that much more difficult to thread the needle on a given vote when you’ve got these disparate views within the party.

Jennifer Doss: Yeah. I think one of the things we’ve always been proud of in the retirement industry is that It’s bipartisan. and so it’s unfortunate that I think even retirement could become, a partisan issue, right? And it could get lumped into some of these tax cuts.

I think not a lot of people remember, but there was a [00:16:00] brief, introduction of the Rothification of 401k plans back in 2017, when they were first passing this, tax cuts and jobs act you refer to. So, it can happen.

Scott Eckel: It can. I will say though, yes, listen, so much in Washington right now is not bipartisan. The good news on state retirement tax provisions is they are generally very popular across the political spectrum. And while there may be shades of difference between the two parties, one reason why they’ve been able to protect most of the existing structure, is because at the end of the day, when push comes to shove voters, generally like to have the retirement benefits they have

That’s the good news. The other good news is that while, the industry will be on guard to protect the retirement tax incentive structure that we have, some of the challenge, is that you have to retain the,

Income beyond the 10 year scope here that it’s usually measured and so that [00:17:00] has in the past, brought in rothification to bring revenues forward. now, because of some of the dynamics of what they’re wrestling with the long-term budget, they might not necessarily need to bring the revenue forward.

Peter Ruffel: They might need to have it there in the back end more in the coming years. You’re teeing us up a little bit, Scott, on some of the things that we want to talk about, one of which is something that hit the news last week, which was the House passing at least the blueprint for the GOP budget, that I think, was, Turbulent, worrisome, may not have happened as fast as it did, so I think some people were applauding what, the GOP did in the House.

Can you give us a sense of what else needs to happen for that budget to be passed and approved?

Scott Eckel: Sure. passing what they call, the budget resolution in the House was the first step under a particular lawmaking exercise that they’re going to undertake in an effort to pass a big either piece or two pieces of legislation that’s going to encompass a whole lot of stuff, including [00:18:00] funding for those border initiatives that we talked about.

And in particular, of extending the tax. That the so-called Trump tax cuts from the first term, and then potentially also adding in, remember when, President Trump was on the campaign trail this last fall, he didn’t just run on extending expiring tax cuts. In fact, he might not have barely even mentioned that he had a whole bunch of other new ideas that he ran on as well.

among which were, cutting the taxation of tips, cutting taxes on social security. there’s a variety of other ideas he’s had. so in order to pass this big package of things, including getting the tax cuts extended, they are going to use a process in Congress that they call budget reconciliation.

And so there’s a couple things to keep in mind about budget reconciliation. One, if you don’t use reconciliation, if you’re passing your average piece of legislation in Congress, in the Senate in particular, you need [00:19:00] 60 votes to get over the filibuster threshold to pass legislation.

Republicans don’t anticipate getting any help from the Democrats on this big package of tax extenders and funding for the, border, et cetera. They only have those 53 votes, remember, in the Senate. And so you can use, and it’s been used, something like 23 times in the past 20, 30 years.

This process called budget reconciliation. There’s a few caveats to that. but one, if you do use budget reconciliation, you can pass things with a bare majority. So 51 votes in the Senate, a bare majority in the house. but the provisions within budget reconciliation have to have a revenue impact as their main force of being.

we’re going to say this is X amount of funding for the wall. Okay. That’s a funding provision. Or this is a tax provision that’s going to cut X amount from the budget because we’re going to keep these rates low for individuals. Okay. You couldn’t just put in a budget reconciliation bill, something [00:20:00] that said,

Hypothetically, we’re going to ban abortion or something. Cause that’s not a revenue impacting provision. Okay. So everything in there and the parliamentarian in the Senate is very, exacting on these requirements. It has to be a budget related provision to go in this bill.

and so that is how they’re going to try to get it done. again, threading the needle is tough, though, because you need to do have some offsets for these tax provisions. And, so then you’re going to cut some government programs of one. thing or another. And that’s where it gets tricky because you have some more moderate members of the Republican Party that are, we don’t want to cut anything, along say Medicare lines or something like that.

but then you have another, part of the caucus that says, we’re not going to support this if we don’t get some meaningful, cutting and spending, because we’ve got a deficit that’s out of control, et cetera. So again, threading the needles can be tough. this is where President Trump is important.

He’s popular right now and, he can try to keep his, caucus in line to try to get this over the line. One last point on this is that [00:21:00] there’s actually been a disagreement amongst Republicans on strategy here. the Republicans in the Senate. have argued for a two bill approach that will do the stuff that everyone agrees on first, a smaller bill that would just fund some of the immigration related stuff, and then we can repeal some of the clean energy provisions that were passed under the Biden administration to pay for it and get a win out of the gate and say the first 100 days of the administration and then do the tax stuff later.

The House Republicans have argued pretty vigorously The other way that they want to do one big, beautiful bill as Trump has called it, and that put it all together with the tax stuff, because they’re worried that if you separate out the immigration stuff, which, most everyone in their party agrees on from the tax stuff, where it gets dicier on how you pay for it, whether you’re gonna, raise the so called salt limit for high tax states, where there’s currently a limit on how much you can deduct from your state and local taxes.

some of the blue state Republicans want to raise [00:22:00] that, red state Republicans generally don’t. Okay, so that’s gonna be a big fight within the fight over tax reform, but they think they can’t get a standalone tax bill done. And so they want it all together to have the political sort of power of it all being all together and they think that Republicans won’t vote against it.

that one big bill. The problem is it could take several months to get the one big bill done, and then you don’t get the win in the first, say, six months of the year.

Peter Ruffel: Interesting. So it seems like there’s going to be still a lot to come with that either budget and then form, past that obviously the tax proposals thereafter. So a lot to look at. It sounds like it’s going to keep you busy for the next few months,

Scott Eckel: There’s a lot, and I didn’t even mention the debt limit needs to be increased here in the next few months, and as of right now, that’s going to ride on this budget reconciliation vote, so that’s one more big thing that’s in there that republics are going to have to vote for if it’s part of this package, and a lot of them have never voted to raise the debt limit, so we’ll see how that plays out as well.

Peter Ruffel: I [00:23:00] was listening to Elon Musk addressing Trump’s cabinet and he brought up that point that a lot of people are making, which is the interest that we’re paying on our deficit is now outpacing our defense spending. How does this, at least what we’ve seen so far come through the House, address some of the deficit?

Is it doing enough or do you expect maybe the Senate’s version to address that more deliberately? I

Scott Eckel: right now we have something like a 36 trillion national debt accumulated. this year we’re looking at something like a 1. 9 trillion deficit for this year. as you mentioned, last year was the first time ever that just interest on the debt surpassed all of our defense spending for our country.

And we by far have the largest defense budget in the world. It’s not even close. So every plane, every, salary of every member of our armed services, every military base, [00:24:00] all the gas to have our carriers ship around the world, everything, all of that, 900 and some billion dollars. We’re paying more than that in interest, just an interest on the debt.

does what we’ve talked about in reconciliation, there’s going to be some amount of budget cutting in there that some of the, particularly in the House, have pushed for some additional spending cuts as part of that.

that’s not a done deal yet. Is that exactly what the bill is going to fully look like at the end of the day? I think there could be some meaningful deficit reduction out of budget reconciliation, especially on a percentage of GDP, over the course of say, 10 years. But let me be clear.

No one is really talking about balancing the budget right now. You didn’t exactly ask this, but maybe I’ll just touch on this a little bit here. you mentioned Elon Musk and the doge and the budget cutting and all these, government agencies, culling, government workers, et [00:25:00] cetera.

you can have the debate over. I think you can find efficiencies in our federal government for sure. It’s a sprawling, massive bureaucracy that I think it’s probably a good exercise and an overdue exercise to look for ways to find efficiencies. But you could cut a whole lot of government workers and it’s still only shaving off percentages of the amount of our overall budget deficit.

Where a lot of the money is in four or five places, which is social security, Medicare, defense and the interest on the debt, which you can’t get to unless you start cutting the other things first. the president has said, we’re not interested in cutting Medicare.

We’re not interested in cutting social security. We’re only marginally interested in cutting some, waste fraud and abuse out of Medicaid. at the end of the day, if you’re not going there, you’re not going to really get that close to

balancing the budget.

Peter Ruffel: you’ve mentioned where a lot of the money is, right? But those are the things they’ve said we’re [00:26:00] not going to touch. So I know, you Medicaid, Medicare could be within this Budget Reconciliation Act. My understanding, and this could be wrong, please correct me, is that Social Security actually can’t be part of that Budget Reconciliation Act.

Jennifer Doss: Social Security at risk at all here? Or, I know they said it’s off the table,

Scott Eckel: I could be wrong on that. I think it could be included in budget reconciliation, but there are no plans to include it in budget reconciliation. So I don’t expect that it’ll be included. the only way that it possibly could be, or at least where there’s a chance I think from a political perspective is that again,Trump, ran on cutting taxes on social security.

so there’s a chance. that they address that by actually cutting taxes on social security and this reconciliation package. That’s a possibility. The problem there is that social security is already in the medium and long term, hemorrhaging money. And at some point it’s going to run out of money.

And so if you cut the [00:27:00] tax income that goes directly to that program from social security taxes, which fund the social security program. Then you’re even cutting a bigger hole in that longterm deficit of that program. you can answer your question a couple of different ways in the short term.

I don’t think anyone has to really worry about them cutting social security benefits in the next, several years, At least coming out of this reconciliation package, the more concerning aspect. Is from the long term perspective at some point, everyone agrees that you’re gonna have to do something for the long term sort of sustainability of Social Security, Medicare, et cetera.

and I don’t think they’re going to Do much if anything in that regard either, in the short term anyway,

Peter Ruffel: Scott, you mentioned Gary Gensler earlier, and obviously with the new administration there’s some new heads of some of the departments. It’s been a great amount of time. Thanks for watching! Across the government, shifting back maybe toward something that’s centerfold of your crosshairs. What is the new, head of the SEC spell for security and investment [00:28:00] industry, Paul Hackens, former SEC ed?

So there’s probably some things that you can pull from

historically speaking, but what, what do you think might be different this time

around?

Scott Eckel: so yes, so Paul Atkins who has not yet, by the way, he’s not had a Nomination hearing scheduled yet in the senate. head of the sec is a big job, but it’s a little below like the cabinet agencies as far as profile and priority. we expect that he probably gets a nomination hearing sometime in the next, month or so, if I had to guess, but then it may take a little longer for him to actually get confirmed on the Senate floor.

But he’s a known entity in Washington. he was a former commissioner, interestingly. The two other current Republican commissioners, Hester Peirce and Mark Ueda, both worked for him at one point or another when he was a commissioner. So they all know each other very well and are pretty well aligned from an ideological standpoint.

I think broadly, if you want to speak with a broad brush, industry is generally, happy to see a Paul Atkins come in as the chair of the SEC. I think he’s seen as generally. industry friendly. I think, one of the top [00:29:00] priorities and they’ve already set up a crypto task force headed by Commissioner purse is one of the very top priorities there is not really an across-the-board federal regulatory regime for digital assets.

And so they want to work towards that in conjunction with Congress. There’s legislation in Congress as well, but they can do a two-pronged approach to it, both in the SEC. and Congress, to set up a rationalized sort of federal regime for crypto related assets. The other thing they’re doing is on the enforcement front, under Gary Gensler, there was several lawsuits brought against crypto related, firms they’re coming every day now.

they’re announcing that the SEC are not pursuing some of those pending, enforcement cases against, crypto related firms, so there’s that as well. one item that I would say that we’re behind, as well as several other firms at the SEC and in Congress, but we’re actually hopeful that the SEC will act in this area, and they can, is on eDelivery, [00:30:00] and your certain documents that broker dealers investment advisors are required to deliver to their clients, and the default form of delivery is Via paper.

Okay. And it’s been that way for forever, right?we’re now 25 years into the 21st century, though. And,most of our customers actually go and choose e delivery now, but there’s still a sizable. Shunk of people that don’t mostly because of inertia, but we think, from a, cost to deliver, products to our customers, from environmental perspective to even a safety perspective, we and others initially think it would make sense now to go to a default.

E delivery and if people still want paper they can opt into paper, but the default would be e delivery. We think it’s overdue and frankly, the government-run TSP program and social security not two entities known for being cutting edge, from a Technological standpoint default e delivery for a long time So we’d be catching [00:31:00] up to the government sector if we do that and we hope the sec

Addresses Well,

the coming months

Peter Ruffel: I’m sure maybe your counterparts from the paper industry are listening to this and maybe jumping on talking to policymakers on the opposite

Scott Eckel: that actually has been an issue in the past. We’re hopeful. that maybe that opposition from the paper industry will have subsided by now. we’ll see.

all sorts of angles always comes out of the woodwork when change is on the horizon.

Jennifer Doss: Yeah, we actually have been talking to some of our listeners about that because in the Department of Labor side, which I’ll pivot to here in a second. been lobbying for that too, right? Which is e delivery. That should be the default. You can opt into paper,finally made some headway there, have some safe harbors in place for.

committees,to be able to follow and then we took a slight step back in secure 2. 0 by,you have to send one paper statement now, year. so we are also expecting a new head of the Department of Labor. do you think the direction of that department’s going to be? had recent regulations. We’ve been [00:32:00] talking to our investors about,ESG rule or environmental social governance, investing. had a fiduciary rule recently.

what are the types of things stance that they might take in some of those areas?

Scott Eckel: Yeah, so you got two layers here. You’ve got the actual head of the Department of Labor, the Cabinet Secretary, and that, is a former, Republican congresswoman who is, going to send to that role. She just cleared committee. and, she’s actually considered, I think, from traditional conservative liberal standpoint, more liberal on some of these issues than your average Republican nominee.

So that’s. somewhat interesting. Although I have a feeling that her focus will be more on traditional labor related issues than say, the ERISA, retirement rules. That’s probably not going to be as much of a focus, but we do have a nominee for what they call EBSA, which is what the Employee Benefits Security Administration.

Something like that. huge problem. And

that person’s been nominated. No hearing yet. I don’t believe, for that role. Again, that’s [00:33:00] getting down another layer or two. So it’s, it takes a little longer usually to get that person in place. But, person who’s been nominated is Dan Aronowicz, I think is how you say his last name, and I think you guys are familiar with him.

did you say he’s even appeared on this podcast in the past? Is that right?

Jennifer Doss: He is. You guys share a connection now.

Yes.

Scott Eckel: So he’s a well known entity in the 401k pension world. I’ve just been doing a little bit more reading on him more recently. I’ve not, was not super, plugged in on where he was coming from on these things.

But I think it’s fair to say with just in the broader scope of this administration’s priorities,ESG related things are going to on the cutting block in general with this administration. So I think you’re not going to see an emphasis on ESG related stuff coming out of the Department of Labor.

And you may see some amount of rolling back potentially. I think similarly on the fiduciary rule. I wouldn’t be surprised if the administration did not. continue defending,the rule that’s in [00:34:00] litigation right now that was, put forward under the Biden administration. I don’t think you’re going to see it look working to expand the scope of the fiduciary rule and administration.

I don’t know how much they’ll actively try to chip away at it, but My guess would be going back more to like where the status quo was pre Biden administration,I would say, The biggest takeaway from learning a little more about, the EBSA nominee, Mr.

Horowitz, is that, at the end of the day, he’s not particularly pro ESG but what he’s really focused on is litigation, that Is targeting, 401k plans and the company fiduciary. and he said all this widespread litigation against 401(k) plans has made it a litigation trap to even offer a plan.

And so at the end of the day, the biggest thing you would see out of him is he’s pro plan sponsor and defending the plan sponsors in the litigation marketplace, et cetera.

Peter Ruffel: we, we, we’re thinking about it the same exact way. Scott. We’re like, you said, we’re, we’re excited to see what he can do for the industry. We think he’s a valuable [00:35:00] proponent for it. we’ll be staying tuned to his impact there on Capitol Hill. it’s about time Scott, where we shift to the last question, which is a personal question that we like to ask all of our guests.

Okay.

is, retirement look like for you?

Scott Eckel: That’s a good question. I’ll set the context a little bit. I have six children, and, my oldest is a senior in college but she’s actually engaged to be married this summer,Thank you. Yeah. and, she’s out in college in Wyoming. She’s going to get married back here in Virginia where we live.

And so my wife and I are back to planning a wedding a little bit again. So there’s that. but with six kids, I also range all the way down to an eight year old third grader. so. that’s a long way of saying I’ve got a ways to go. I’m not super focused on my,Oh, I can’t wait until this date coming up anytime soon that I’m going to retire and this is what retirement looks like.

so there’s that. I think I’ve got a ways to go. I think it’s another 13 years before my youngest, Theoretically, graduates from [00:36:00] college. but I would say a couple things. I think anticipating that we may have some grandchildren out of those, six, kids of ours that I think we’d want to be in our retirement.

Close to at least some of them. I don’t envision myself going off to a 55 plus community. That’s not my ideal retirement. I might have a little more land around me. I’m right in a close in suburb in Alexander, Virginia. And so maybe a little more space, a little more woods.

and stuff like that. But if I’m close to the grandkids and then if you really let me daydream and if we can make this happen for the first time in 23 years after our honeymoon with all those six kids, my wife and I never traveled, just us together. And so a year and a half ago, We took our first just us vacation in 23 years because my older girls were able to come home for college and babysit.

And so we went to Spain for 10 days and I’ll tell you, we love Spain. And, we went back again for a few days last year and then went to Southern France. But I’ll say when we daydream, can we get a little place in Spain that we [00:37:00] could. Spend maybe a little part of the year in, going forward.

So that’s a, maybe a couple of thoughts I have about, what maybe at some point a retirement holds for me, spending time with the grandchildren, being involved there and, maybe a little time in Spain.

Peter Ruffel: it. I love it. That’s, I mean, it’s, it’s what it’s all about. You got to have goals for retirement of something you need to work towards and you’ve got them, you’re manifesting it. So it’s a beautiful thing. Scott, just want to thank you again for your time today. Obviously, it’s super valuable to hear perspectives like yours amongst other things.

All the noise that’s coming from Capitol Hill. It’s certainly tough to keep up with it at times. also a quick thank you to our listeners for tuning in. Just a friendly reminder if you are enjoying the content, please subscribe to Revamping Retirement wherever you may get your podcasts.

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Nancy: This presentation does not contain legal, investment, or tax advice.

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