Client Service November 27, 2023

What the 2024 Election Will Mean for Advisers

When it comes to retirement planning, expect increased attention on the fiduciary investment adviser proposal, contribution limits and tax cuts.

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The 2024 presidential and congressional elections are a little less than a year away, meaning retirement plan advisers can expect debate to bubble up around issues such as Social Security, tax policy and Americans’ long-term savings.

While the conversations may not always lead to action, a few topics are worth keeping on the radar for advisers, according to retirement experts. 

Social Security

While Social Security may remain a hot topic in next year’s presidential and congressional elections, Matthew Eickman, the national retirement practice leader for Qualified Plan Advisors, does not foresee any notable reform to the program coming out of 2024 campaigns.

Social Security has been a partisan issue in the past, whereby voters might expect that proposed cuts to Social Security would depend upon which party won, according to Eickman, but that is no longer the case.

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“I think we saw with former President Trump, for example, an approach defied conventional wisdom regarding what a Republican president would say,” Eickman says. “He was not of the mind that he was going to do anything dramatically different to Social Security. My expectation is that we’ll hear ideas about potential changes to Social Security and, if nothing else, what we might see is eventually further delay in changes to the full Social Security retirement age. But short of that, I am not expecting that there will be significant Social Security reform within the next several years.”

Eickman says the Department of Labor’s recent retirement security proposal will very likely be an issue in the upcoming election. Introduced in late October, the fiduciary investment adviser proposal would redefine when retirement advice triggers fiduciary status under the Employee Retirement Income Security Act of 1974.

“We know that the Biden administration is going to work quickly to try to get a final rule on the books so that the next administration and/or Congress has fewer options in any attempt to abandon that rule, specifically if the Republicans are in control at the White House and/or Congress,” he says. “So that’ll be a big topic of conversation.”

401(k), 403(b) Caps

Eickman expects there will continue to be discussions about potential caps on 401(k) and 403(b) accounts. As with Social Security, however, Eickman anticipates most retirement plan issues will be neither public policy-driven nor prone to partisan divides. He believes Democrats will not come out strongly in favor of a cap because they do not want to lose wealthy voters.

T. Rowe Price’s Aliya Robinson, the managing legal counsel of legislative and regulatory affairs, said at a retirement market outlook event on November 14 that the upcoming expiration of the Tax Cuts and Jobs Act could be another relevant topic in the year ahead.

“The Tax Cuts and Jobs Act expires in 2025, so the election will be a big point for people who support that provision to talk about keeping it in place and possibly expanding it,” Robinson said.

Eickman predicts several of the sunset provisions—those set to expire—will impact investment advisers who work with investors in personal or a private wealth management capacity. There will also be multiple tax advantages that will expire if they sunset as expected.

“What I anticipate is that there will be a lot of investment advisers better understanding the TCJA, better understanding what is set to expire,” he says. “They will encourage their clients to make decisions in 2024, in particular, with the expectation that they will not have the same tax advantages available to them in 2025.”

Robinson also said she expects Congressional policymakers to focus on some bigger-picture ideas, including ways to increase retirement plan coverage further and to make lifetime income more readily available.

“They’re looking at ideas that run the gamut from a federal auto-IRA program that mandates every employer to put in 401(k) or IRA provisions all the way to small technical changes, such as decreasing the minimum participation age from 21 to 18, and including voluntary or mandatory auto re-enrollment,” Robinson said. “They are very concerned about making sure that people not only have saved enough for retirement, but that they’re able to use their retirement savings effectively.”

Deals & People November 22, 2023

PGIM Names Sancia Dalley Managing Director of DEI

She will oversee HBCU investment strategy.

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Sancia Dalley

PGIM, Prudential Financial Inc.’s global asset management business, has hired Sancia Dalley as a managing director in its office of diversity, equity and inclusion, a newly created position, overseeing PGIM’s DEI investment portfolio and HBCU investment strategy.

According to a firm statement, HBCUs continue to have fewer resources than comparable peers in higher education institutions across multiple disciplines, including finance and investments.

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Dalley will work directly with select historically Black colleges and universities to support the financial acumen of their students, a spokesperson said via email. She will also partner with Prudential Financial Inc. on the DEI investment portfolio to oversee manager relationships, source fund managers and manage the policies, procedures and goals of the portfolio. She reports to Kathryn Sayko, PGIM’s chief DEI officer.

“Throughout her career, Sancia has demonstrated the fearlessness needed to tackle difficult and complex challenges facing underrepresented people, communities and countries, and has done so with tremendous impact,” Sayko said in a statement. “Her expertise and network will help advance PGIM’s leadership in these two important initiatives, while supporting our efforts to create equitable access to capital, knowledge and experience for the next generation of financial professionals.”

Dalley joins PGIM from Robert F. Kennedy Human Rights, where she served as senior vice president of investor engagement and strategic partnerships. She grew the RFK Compass Investors Program into a platform of 400 institutional investors and asset managers with $7 trillion in assets under management.

She also chaired the foundation’s annual investor conference. Dalley created a workstream that provided opportunities to emerging diverse managers in alternative investments for access to capital and mentorship.

Early in her career, Dalley worked with the former U.S. ambassador to the United Nations, Richard Holbrooke, to build the Global Business Coalition, an organization providing resources to countries impacted by critical health issues. She then went on to serve as vice president in the U.N. Envoy’s Office for Health Financing under GBCHealth.

“PGIM is committed to helping to close the racial wealth gap,” according to a company statement. “Industry data continues to show that women- and minority-owned asset managers still oversee less than 2% of assets under management globally. Prudential is committed to supporting an expanded universe of asset managers, including diverse asset managers, in the alternatives space in order to achieve above-market-rate returns and to help enable wealth creation.”

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