Join us on June 30, at 11:00 a.m. ET for a webinar discussing the recent and potential impacts of the U.S. Government policies and decisions, and their effects on retirement plans for sponsors. Register now.
The impacts are coming simultaneously from Congress, the White House, and the Supreme Court – and with the current—very dynamic—environment in Washington, it seems more can be expected.
Congress
The main event in Washington in the summer of 2025 is the authorization of the FY2026 budget which Republicans expect to accomplish by passing the “One Big Beautiful Bill Act”. While this bill passed the House (by just one vote) without harming the tax-advantages of employer-sponsored retirement plans, substantial risk remains. Several Republican senators have voiced opposition to the bill, and together, they could derail it. The rationale provided by these opponents vary widely, making it hard to see the outline of an acceptable compromise. Given this uncertainty, until the president signs a bill, we expect our community of plan sponsors and service providers to remain hyper-vigilant to new developments.
The White House
In the executive branch, President Trump has issued over 150 executive orders. The impact of these orders to the retirement industry is limited to the investment side of the business. The Trump administration opposes investments in China or ESG strategies and supports investing in cryptocurrencies and private markets. The regulators, who are under staffing and budget pressure from DOGE-related efforts, can impact retirement plans through both action and inaction.
For instance, the industry is eager to get the final rule on catch-up contributions, as the proposed rule is overly complicated to administer. While most plan sponsors and service providers want modifications to the proposed rule, it’s unclear whether the IRS has the resources to finalize this rule anytime soon.
The Supreme Court
The outlook from the courts is troubling. In Cunningham v. Cornell University, the Supreme Court unanimously ruled that plaintiffs do not need to prove that statutory exemptions to ERISA's prohibited transaction rules apply to their case. This makes it easier for lawsuits to survive the motion-to-dismiss phase and move to the discovery phase where litigation costs climb rapidly. This lower standard may lead to increased litigation costs for employers. However, this case could be the political fuel to power legislative litigation relief if Congress recognizes that the Cunningham decision creates unacceptable litigation risk. Creating this relief in through legislation will not be easy, but a window of opportunity may be opening.
Webinar
Tax Cuts & Law Changes: What Sponsors Need to Know
Learn more about the recent and potential impacts of the U.S. Government policies and decisions, and their effects on retirements plans for benefits sponsors.
