401(k) Specialist Issue 2 - 2023 - 10

401(k) FIDUCIARY FILE
SEC Publishes Final Guidance on Reg BI
The bulletin focuses primarily on the Care Obligation with Reg BI
and the duty of care under the Investment Advisers Act of 1940.
The latest guidance comes after Rep. Byron Donalds released a
note accusing-and discouraging-the SEC of considering amending
or rewriting the Reg BI.
The letter, addressed to SEC Chairman Gary Gensler, said " there is
no credible evidence to date that Reg BI is not working as intended,
or that investor protections have been weakened as a result of Reg
BI being in place. "
Donalds also discouraged the agency from rewriting the rule
THE SECURITIES AND EXCHANGE COMMISSION (SEC) released
its third and final staff bulletin in a series on Regulation Best Interest
guidance, expanding on the responsibilities of brokers and advisors
and its standard of conduct and seeking to inform professionals on
current regulation.
through " guidance, 'FAQs', or other methods that likely violate the
Administrative Procedure Act (APA). "
During his testimony before the House Financial Services
Committee, Gensler responded to questions on whether the SEC is
considering a rewrite of Reg BI, noting that an amendment isn't on
the SEC's agenda.
Yet, later in the hearing, Gensler hinted on the possibility of a Reg BI
modification, as long as it met the upmost interests of retail investors.
" I think that it's important that this rule live up to its potential,
that best interest really does mean best interest, " he said.
Social Security Trust Fund Projected
to be Depleted in a Decade
ABSENT CONGRESSIONAL ACTION, we are now just one decade
away from the Social Security trust fund becoming depleted, with
only 77% of benefits payable by 2033, according to the Social Security
Board of Trustees annual report on the financial status of the
Social Security Trust Funds.
The report also says the combined asset reserves of the Old-Age and
Survivors Insurance and Disability Insurance (OASI and DI) Trust Funds
are projected to become depleted in 2034, which is also one year earlier
than projected last year, with 80% of benefits payable at that time.
However, by law, the two funds are separate entities and therefore the
combined fund operations and reserves are hypothetical.
Based on a first look at the report, Mary Johnson, Social Security
and Medicare policy analyst at The Senior Citizens League, says there
are no real surprises. She notes the insolvency date moved forward to
2034, but also that last year the Trustees moved it back to 2035 after
they had forecast the 2034 insolvency date in 2021. She added she
suspects the 2024 COLA could be lower than the actuaries forecast.
Michael A. Peterson, CEO of the Peter G. Peterson Foundation, a
nonprofit, nonpartisan organization dedicated to increasing public
awareness of the nature and urgency of key fiscal challenges threat10
ISSUE
2 2023 | 401kSpecialist.com
ening America's future, said in a statement the report makes it clear
that doing nothing is not an option.
" If lawmakers fail to act on Social Security, within a decade all
current retirees would face a 23% automatic cut, reducing the
average annual benefit by $6,000 and growing every year, " Peterson
said. " Ultimately, ignoring these Trustee reports won't
make our nation's entitlement problems go away, it will
just make them more difficult to fix down the road. "
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401(k) Specialist Issue 2 - 2023

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