Senators Rob Portman (R-OH) and Ben Cardin (D-MD) late May 13 introduced the Retirement Security & Savings Act (S. 1431), which includes more than 50 provisions intended to accomplish the broad objectives of allowing people who have saved too little to set more aside for their retirement, helping small businesses offer 401(k)s and other retirement plans, expanding access to retirement savings plans for low-income Americans without coverage, and providing more certainty and flexibility in retirement.

Portman and Cardin sponsored a comprehensive retirement policy package that was folded into the 2001tax cut law. Since then, Portman said, "We've seen more Americans participate in 401(k)s and IRAs to save for their retirement but our savings rate still remains too low and there are far too many Americans with no retirement account at all." The bill is seen as going beyond the House's Setting Every Community Up for Retirement Enhancement Act (SECURE Act, H.R. 1994) and the Senate's Retirement Enhancement and Savings Act (RESA, S. 972), which have many overlapping provisions and are seen as unfinished business from the last Congress.

The bill would increase the "catch-up" contribution limit from $6,000 to $10,000 for those over age 60 with 401(k) plans. It would also increase the tax credit for employers that offer safe harbor automatic enrollment plans starting at 6% of compensation (up from the current 3%), which was also addressed in legislation introduced by current Ways and Means Committee Chairman Richard Neal (D-MA) in the last Congress.

To help small businesses, the bill would:

• Increase the current law tax credit for small businesses starting a new retirement plan from $500 to as much as $5,000
• Provide a small business tax credit for adopting the more generous safe harbor from costly rules
• Establish a new three-year, $500 per-year tax credit for small businesses that automatically re-enroll plan participants into the employer plan at least once every three years

For low-income Americans, the bill would expand the existing Saver's Credit income thresholds and make the credit directly refundable into a retirement account. It would also expand the eligibility of 401(k)s to include part-time workers that work between 500 and 1,000 hours of service for two consecutive years.

The bill would increase the age for required minimum distributions from age 70.5 to 72 in 2023 (the SECURE Act and RESA would increase the age to 72 in 2020) and age 75 by 2030. It would also encourage expanded use of Qualifying Longevity Annuity Contracts (QLACs), retirement plans that provide annual payments to individuals who outlive their life expectancy.

The bill is attached, along with a summary of the prior version, to which only minor changes have been made.

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ATTACHMENT

Retirement Security and Savings Act

Portman Cardin RSSA Summary