Retirement Planning Official Take Note: DOL, IRS Beefing Up Enforcement Efforts

For the retirement planning industry, "the stakes are higher than they ever were," Carl said. "Lots of enforcement folks are running around kicking the tires."

While the current administration is focused on enforcement initiatives, like previous administrations, it's also pushing an agenda to address how unprepared most workers are for retirement.

Carl listed some statistics that demonstrate why the administration is worried:

• 54% of workers report less than $25,000 in total savings and investments; 27% have less than $1,000;
• Half of U.S. workers do not have access to employer-based retirement plans;
• Only 54% of small businesses (those with fewer than 100 employees) offer a retirement plan;
• Plan participation rate is 75% for those with access to a plan; and
• The average account balance of the typical retiring DC plan participant is $144,000.

To combat its retirement planning concerns, the administration is pushing a pretty sizable agenda—including expanding the definition of who's considered a fiduciary. Carl said that while there should be a "more level playing field so consumers know what they are getting when it comes to advice," referring to the DOL's regulation amending the definition of fiduciary under the Employee Retirement Security Act (ERISA), "I'm not sure it should be a Title 1 ERISA" fiduciary standard. The fiduciary standard "should be something [the retirement planning] industry can comply with without mass change."

The administration's retirement planning agenda, according to Carl, includes:

• Auto IRA;
• Plan startup tax credit;
• Target date analysis;
• Plan fee transparency;
• Lifetime income options in DC plans;
• Investment advice proposal;
• Increased IRS and DOL enforcement and compliance assistance;
• Expanded definition of ERISA investment advice fiduciary; and
• Social Security reform.