Potential Head of Employee Benefits Agency Has Lobbying Ties

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By Jacklyn Wille

The man President Donald Trump nominated to run the Labor Department’s employee benefits agency has close ties to the retirement industry. In addition to Preston Rutledge’s years as senior tax and benefits counsel for the Senate Finance Committee, he’s married to a registered lobbyist who counts the American Retirement Association as a client.

Rutledge’s wife, Julie Gackenbach, owns Confrere Strategies LLC, a small Washington lobbying firm with three clients and $179,000 in revenue in the first three quarters of 2017, according to lobbying disclosures filed with the federal government. Earlier this year, Confrere began representing the American Retirement Association, a national association of retirement plan professionals, including financial advisers, consultants, administrators, actuaries, accountants, and attorneys.

ARA hired Gackenbach’s firm in February 2017 to lobby on the importance of retirement savings to economic growth and financial security, according to paperwork filed pursuant to federal lobbying laws. Records indicate that ARA paid Confrere $63,750 for its lobbying services in the first three quarters of 2017.

If he’s confirmed by the Senate, Rutledge will lead the Labor Department agency in charge of retirement, health, and other employee benefit plans. The Employee Benefits Security Administration’s activities include writing regulations that govern retirement plans and filing lawsuits against plan fiduciaries who break the rules.

Ethics Considerations

Rutledge disclosed his ties to Confrere in paperwork recently filed with the Office of Government Ethics in connection with his nomination. Rutledge vowed that, if he is confirmed as head of EBSA, he won’t participate in any matter that he knows to have a “direct and predictable effect on the financial interests” of Confrere unless he obtains a written waiver. He also vowed not to participate in any particular matter “involving specific parties in which I know a client of my spouse is a party or represents a party,” unless authorized by law.

When reached for comment, Gackenbach told Bloomberg Law that she and Rutledge were committed to complying with all applicable ethics rules.

“If my husband is fortunate enough to be confirmed, I will not lobby or have any interaction with EBSA,” Gackenbach said. “My husband and I will at all times fully comply with the terms and conditions of all ethics rules and agreements.”

Gackenbach declined to answer questions about whether her relationship with ARA would continue if Rutledge is confirmed by the Senate.

ARA didn’t respond to Bloomberg Law’s inquiries.

ARA Policy Positions

In recent years, ARA has taken a number of public positions on policy issues related to or driven by EBSA.

In 2015, ARA wrote a lengthy comment letter that was generally supportive of the Labor Department’s proposed fiduciary rule, a controversial regulation aimed at reducing the supposedly conflicted investment advice given to retirement savers. The Obama-era rule has since been whittled and delayed by the Trump administration.

ARA also supports automatic payroll deductions that funnel into individual retirement accounts as a means of increasing worker access to retirement savings. The group opposes increasing the premiums that defined benefit plans pay to the Pension Benefit Guaranty Corp. for federally-backed pension insurance.

Finally, ARA largely opposes tax proposals that would lower the limit for annual 401(k) contributions, which is scheduled to increase to $18,500 in 2018. Despite weeks of rumors that such a cut was in the cards, the tax proposal released by congressional Republicans Nov. 2 doesn’t change the 401(k) contribution cap.

In addition to ARA, Confrere’s clients are the National Association of Mutual Insurance Companies and State Farm Mutual Automobile Insurance Co.

To contact the reporter on this story: Jacklyn Wille in Washington at jwille@bna.com

To contact the editor responsible for this story: Jo-el J. Meyer at jmeyer@bna.com

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