Deals and People October 13, 2017

Trump Eying Top Aide to Sen. Hatch for Lead EBSA Role

The future head of EBSA would play a substantial role in the fate of the fiduciary rule.

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President Donald Trump has announced his intent to nominate Preston Rutledge as head or assistant secretary of labor for the Department of Labor (DOL)’s Employee Benefits Security Administration (EBSA), according to an official release from the White House.

If appointed, he could heavily influence what happens to the DOL’s conflict of interest rule. The announcement comes on the same day a bill to repeal the fiduciary rule passed the House Financial Services Commission. That bill also aims to erase the impartial conduct standards of the rule which underwent implementation in June.  

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The fiduciary rule is scheduled for complete implementation on January 1, 2018. However, EBSA has proposed to delay the rule and its accompanying exemptions until July 1, 2019. This could give the DOL more time to conduct its review of the rule under direction of President Trump.  

Rutledge currently serves as senior tax and benefits counsel on the Majority Tax Staff of the Senate Finance Committee, and as top aide to Sen. Orin Hatch of Utah.  

Prior to joining the Finance Committee, Rutledge had served as a senior technical reviewer in the Qualified Pension Plans Branch of the IRS Office of Chief Counsel. He has also worked in private law practice as an employee benefits counselor and ERISA (Employee Retirement Income Security Act) litigator.  

Rutledge played a role in designing retirement legislation sponsored by Sen. Hatch, including The Retirement Enhancement Savings Act (RESA), which some analysts say may provide language that could offer plan sponsors more fiduciary protection in offering in-plan lifetime income options. 

Rutledge earned a bachelor’s degree in business from the University of Idaho, and a J.D. from the George Washington University School of Law. 

Previous head of EBSA, Phyllis Borzi, was instrumental in birthing the rule under the previous Administration. 

Benefits October 13, 2017

The Social Security Administration Announces COLA for 2018

Social Security and Supplemental Security Income recipients will see a 2% increase next year—the largest increase since 2012.

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The Social Security Administration announced today that monthly Social Security and Supplemental Security Income (SSI) benefits for more than 66 million Americans will increase by 2%. The 2% cost-of-living adjustment (COLA) will begin with benefits payable to more than 61 million Social Security beneficiaries in January 2018. Increased payments to more than eight million SSI beneficiaries will begin on December 29, 2017.

This is the largest increase since 2012, but comes to only $25 a month for the average beneficiary. 2017 saw a slight rise of only 0.3%.  

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The cost-of-living increase (COLA) is based on a broad measure of consumer prices generated by the Bureau of Labor Statistics (BLS).

The Consumer Price Index (CPI-W) rose this year, indicating that on average, prices for goods and services are more expensive. Since the CPI-W did rise, the law increases benefits to help offset inflation.

The maximum amount of earnings subject to the Social Security tax (taxable maximum) will increase to $128,700.

The earnings limit for workers who are younger than “full” retirement age (age 66 for those born from 1943 to 1954) will increase to $17,040. (The Social Security Administration deducts $1 from benefits for each $2 earned over $17,040.)

The earnings limit for people turning 66 in 2018 will increase to $45,360. ($1 from benefits are deducted for each $3 earned over $45,360, until the month the worker turns age 66.)

There is no limit on earnings for workers who are at the “full” retirement age or older for the entire year.

Read more about the COLA, tax, benefit and earning amounts for 2018.

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