Preston Rutledge, senior tax and benefits counsel on the Senate Finance Committee and a top aide to Sen. Orin Hatch, R-UT, will be tapped to head the Employee Benefits Security Administration, according to a report in Politico Pro.
Rutledge has served on the Finance Committee since 2011. He spent the previous decade as a tax law specialist at the IRS, according to his LinkedIn page.
The head of EBSA serves as the Assistant Secretary of Labor, a presidentially appointed sub-cabinet level position that requires a Senate confirmation.
As head of EBSA, Rutledge would be instrumental in drafting revisions to the fiduciary rule.
Full implementation of the rule is scheduled for January 1, 2018. Labor has proposed delaying that date by 18 months as regulators continue to carry out a White House ordered review of the rule.
He would also be in charge of enforcing the impartial conduct standards, the portion of the fiduciary rule that was implemented in June.
If nominated and confirmed, Rutledge would represent a wide departure from Phyilis Borzi, the previous head of EBSA under the Obama Administration.
His confirmation could mean a boon for annuity providers. Efforts to write a safe harbor for employer plan sponsors that would facilitate wider adoption of annuities in 401(k) plans stalled under the Obama administration.
At NAPA’s 2014 401(k) Summit, Rutledge, a guest panelist, said, “I’m a fan of lifetime income,” according to reporting in BenefitsPRO.
He also expressed support for mandatory retirement savings programs.
As the top benefits counselor on the Senate Finance Committee, Rutledge was instrumental in crafting retirement legislation sponsored by Sen. Hatch.
One piece of legislation, The Retirement Enhancement Savings Act, unanimously passed the Senate Finance committee in the last congress.
As the senior staffer on pension policy, Rutledge was part of negotiations to attach the bill to the 2016 budget. That effort was ultimately to no avail.
Central to RESA was a provision for Open Multiple Employer Plans, or Open MEPS, that would have made it easier for small businesses to pool resources into a common retirement savings plan. Open MEPs, which are designed to facilitate wider adoption of workplace savings plans among small businesses, have broad bipartisan support in Congress.
RESA would also have created more generous tax incentives for individual small businesses that start a qualified retirement plan, and added a new tax credit for small businesses that automatically enroll workers into plans. It would also have removed the 10 percent deferral cap on plan participants that are automatically enrolled.
Fiduciary rule ‘part of the law now’
In a recent interview with Jeffery Snyder, vice president of Cammack Retirement, a consultancy to plan sponsors, Rutledge was presented as an objective expert on retirement policy issues.
As the benefits expert on the Senate Finance Committee, Rutledge said he had limited interface with Labor Department as it crafted the rule under the Obama Administration.
He said he had “some discomfort” with the fact that the fiduciary rule broadened the Labor Department’s authority to regulate IRAs, which are part of the tax code, not Labor law.
Labor “took over the IRA world a little bit,” said Rutledge.
He said Labor’s ultimate finalization of the rule was the result of a “monumental effort.”
“To their credit, they (the last administration) didn’t give up,” he said. “That’s part of the law now.”