collage of regulation stamp(Photo: Shutterstock)

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If you're an employee at the Labor Department's Employee Benefits SecurityAdministration, you might be working some weekends in theforeseeable future.

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From writing the supporting regulations necessary to implementthe recently passed SECURE Act, to crafting a new fiduciary rule, regulators have a shorttimetable to implement rules, some of which will be extremelydifficult to do, according to attorneys with Drinker Biddle.

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Labor previously passed on lifetime income disclosurerequirement

One of SECURE's provisions requires the Labor Department tocraft a model lifetime income disclosure for workplace retirement plans.

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Related: SECURE Act doesn't insulate annuities in 401(k)sfrom a fiduciary standard

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The disclosure will include an assumed monthly annuity paymentbased on the savings in retirement accounts.

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EBSA's deadline to deliver the model disclosure is one yearafter enactment of SECURE, or December 20, 2020. A year after that,retirement account statements will be required to include an incomeestimate at least annually.

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The concept—that an estimated income stream will motivate highersavings rates—is generally agreed upon in policy circles, but isnot without controversy. Some recordkeepers, and at least one tradeorganization representing retirement plan sponsors, have cautionedthat mandated disclosures could undercut how providers already useretirement income calculations to inform savers.

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It won't be EBSA's first attempt to write an income disclosurerule; in 2011 regulators attempted to do so, but ultimately droppedthe effort because it was too hard to do, said Brad Campbell, apartner at Drinker Biddle and former head of EBSA.

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"It's a difficult regulation to write," he said in a websymposium hosted by the firm. "A lot of service providers alreadydo this. The question is what is the right way to do this, and ifone way is required, will that chill innovation on incomeprojections in the marketplace."

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Campbell used the example of a 25 year-old with $5,000 in a401(k). "Lucky you—you just got a $12-a-month annuity. That couldbe a disincentive to save," he said.

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Still no sign of fiduciary rule

EBSA has established the issuance of a new fiduciary rule aspart of its regulatory agenda. Originally, the agency set a releasedate for last fall, and then later for last December.

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But no proposal has been sent to the Office of Management andBudget in the White House, which will have to sign off on theproposal.

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The delay calls into the question the probability of getting anew fiduciary rule on the books by the end of President Trump'sfirst term.

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Proposals at OMB often take 30 days to review, but that can beexpedited. And the rule will have to be open to a public commentperiod, likely for 60 days. If Labor limits the comment period to30 days, it could welcome challenges under the AdministrativeProcedure Act, said Campbell.

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"The longer the delay, the less likely it gets done in 2020, butit's not impossible," said Campbell. "It's in Labor's best interestto get this done expeditiously."

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Election could stymie SECURE and fiduciary rule

If November's election results in a change of administrations,the result would be a likely change in the regulatory agenda andpriorities at EBSA.

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That could impact not only a new fiduciary rule, which Democratswill likely claim does not go far enough to protect retirementsavers, but it could also complicate the stream of regulationswritten to support the SECURE Act.

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"SECURE comes at a time when there could be a change in theadministration," said Campbell. "There's a lot of uncertainty. Theconundrum for regulators is to give the timely guidance we're alllooking for."

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Nick Thornton

Nick Thornton is a financial writer covering retirement and health care issues for BenefitsPRO and ALM Media. He greatly enjoys learning from the vast minds in the legal, academic, advisory and money management communities when covering the retirement space. He's also written on international marketing trends, financial institution risk management, defense and energy issues, the restaurant industry in New York City, surfing, cigars, rum, travel, and fishing. When not writing, he's pushing into some land or water.