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Compliance October 26, 2023
New Speaker Mike Johnson Remains an Enigma to Retirement Industry
Having served on unrelated committees, Johnson’s legislative record on retirement issues is rather thin.
Reported by Paul Mulholland
Representative Mike Johnson, R-Louisiana, is the new Speaker of the U.S. House of Representatives, as of Wednesday. The House can now proceed with pending legislation and consideration of a budget for 2024 before the current continuing resolution to finance the government expires on November 17.
Johnson, first elected to the House in 2016, has served as deputy whip for House Republicans. He has had very little legislative contact with the financial and retirement industries, however.
Michael Kreps, a principal in Groom Law Group and a former senior counsel for the Senate Committee on Health, Education, Labor and Pensions, notes that former Speaker John Boehner “was one of the lead architects of the Pension Protection Act, and [former] Speaker [Paul] Ryan had very public views on Social Security.”
Kreps adds that “this is the first time in a while that we have had a speaker without much of a track record on retirement issues.”
In 2020, while Chairman of the Republican Study Committee, Johnson supported guidance from the Department of Labor of then President Donald Trump that allowed defined contribution plans to invest in private equity if it was bundled into managed funds and not “on a standalone basis.”
Johnson served on House committees on armed services and judiciary, so his influence and experience beyond those sectors has been minimal. Perhaps the primary example of his influence on financial legislation was his co-sponsorship of 2022’s Protect Farmers From the SEC Act, which would prevent the Securities and Exchange Commission from requiring greenhouse gas emission disclosures in the agricultural industry.
Johnson will likely have to take a stance on retirement issues soon, however, as Kreps points out.
“As the Department of Labor rolls out new guidance, it is almost certain that House Republicans will respond, either with increased oversight or by legislating,” Kreps says.
The DOL is expected to issue a new fiduciary rule proposal by month’s end, one which already has received much industry pushback and will likely receive significant opposition from Congressional Republicans once it is formally released.
If Johnson’s hostility to the SEC’s climate disclosure, at least as applied to agriculture, is any indication of his general views on the SEC’s regulatory agenda, then he would likely take a similar view on other proposals which have been unpopular with House Republicans, such as: most of the market structure proposals; swing pricing; and the predictive analytics and conflicts of interest proposal. The DOL’s final rule on ESG investing would also likely be a target for legislation.
It remains to be seen how Johnson will handle the new regulations expected soon from the DOL on the SECURE 2.0 Act of 2022, and he appears to be somewhat of an enigma to the retirement industry.
An emailed statement from the Insured Retirement Institute read, “Speaker Johnson has been a member of the House Judiciary and Armed Services Committees, and neither committee has our issues under their respective jurisdictions, so we haven’t had a lot of direct interaction with his office. We look forward to working with him to continue the bipartisan efforts to strengthen and enhance the retirement security of America’s workers and retirees.”
