Workplace Savings and AIG
Trump executive order focuses on workplace savings plans. AIG CEO cites 'crazy' previous organizational structure.
- October 2018
President Donald Trump signed an executive order to make changes in the regulation of some workplace retirement plans, which industry representatives said could relax restrictions on smaller companies and make it easier for Americans to save for retirement.
“Considering the challenges many Americans are facing in building sufficient long-term savings for retirements that can last 20 years, 30 years or more, the executive order is the right action at the right time,” Alane Dent, American Council of Life Insurers acting senior vice president, federal affairs, said in a statement.
The order contained three central elements. It directed the departments of Labor and Treasury to consider issuing guidance to allow pooled multiple employer plans. Such pools would allow companies to offer 401(k) plans with participants combined from multiple unaffiliated employers, rather than from a single one.
It also directed Treasury officials to consider extending the required minimum distribution rules beyond the current age of 70½ and reducing them once they start. Lastly, it ordered the two departments to streamline notice requirements and reduce the regulatory burden on workplace retirement plans.
“President Trump's executive order is a significant step forward and removes one of the most substantial obstacles for small business employers to offer employees opportunities to gain access to a workplace retirement savings plan,” Cathy Weatherford, Insured Retirement Institute president and chief executive officer, said in a statement.
The changes—if they are enacted—could take months to put into place. Timing of a rollout is uncertain. It is also unclear how new federal rules for the proposed pooled MEPs would mesh with state regulations, which also supervise such plans.
IRI is hopeful the order will fast-track a bill pending in Congress, the Retirement Enhancement and Savings Act of 2018 (H.R.5282/S.2526), Weatherford said. The bill, sponsored by Sens. Orrin Hatch, R-Utah, and Ron Wyden, D-Ore., would increase access to lifetime income products, help savers make more informed decisions about their retirement finances and enhance workplace retirement plan features.
AIG CEO Cites 'Crazy' Previous Organizational Structure
American International Group Inc. continues to reduce volatility across multiple lines of business, according to Brian Duperreault, company president and chief executive officer, who said AIG intends to achieve an underwriting profit by the end of this year.
“Our underwriting results haven't been very good,” Duperreault said. “We continue to look at the way that we take business in and lay off. All that is a work in progress.”
“We are getting there and I believe we will cross the line and by year's end certainly we will be in an underwriting profit position,” Duperreault said, speaking at the Keefe, Bruyette and Woods Insurance Conference in New York.
Duperreault was named CEO in May 2017 and was slightly startled to find multiple levels of dysfunction within company operations.
“One of the biggest surprises was that the organizational structure made no sense and we weren't organized to win,” he said. “We had a crazy structure.”
For example, the multinational company became too U.S.-centric, Duperreault said. And, he questioned some of the internal lines of responsibility. Specifically he pointed to the AIG large account business, which deals with Fortune 500 companies.
“'OK,' I said, 'I want to talk to the guy that is running that,'” he said. “And, they said 'we don't have anybody running that.'”
“I said, 'Maybe I'm not speaking English. I want to talk to the guy running the large account business,'” Duperreault said. “I don't even know how you do this. It would get parceled out. And it would magically come together. I still can't explain it. We reconstructed this thing, and it's going to be great.”
In the past year, AIG has worked hard to change the company's approach.
“You shouldn't write bad business, I don't care what the price is,” he said. “There is an adage, you know, every risk is writable, it's just a question of price. I don't believe that.”
“There are businesses I don't want on the books,” Duperreault said. “There's not a price in the world to justify putting them on the books. So, we've changed the philosophy.”