401(k) industry howls as DOL lets state governments become DC providers with advantageous exemptions
Multiple employer plans' under states will have economies of scale, fewer rules, while ERISA bars private firms from banding together
Seems to me the writing is on the wall and advisors had better re-think their services and how they get paid for them. Sure there is downside for existing business models here, but this also opens a myriad of opportunities to industry participants.
The idea of fed-run (MyRA) or state-run private sector plans are problematic and should send a chill to every retirement plan practitioner save for the very largest Wall Street firms and insurance carriers. State-run plans – whether individual plans, single MEPs or regional MEPs run by the states – smacks at the very heart of the intentions of ERISA which was to keep the states from running private retirement plans.
Personally, I am not willing to take a “wait and see” position as the handwriting on the wall is clear as to the extent of damage this will do to all the small businesses in the retirement plans space, i.e. advisors, TPAs, recordkeepers, auditors, attorneys, etc. The purpose of any government is to expand small business opportunities not constrict them by unfairly competing against them.
This is one issue where we need to lay our differences aside and fight this intrusion tooth and nail. We can only hope Congress will step up and do their job and “stop the madness” before the horses have all left the barn. Let them hear from all of us.