October 27, 2020
Reps. Neal, Brady release 'Securing a Strong Retirement Act'
Ways and Means Committee Chairman Richard Neal (D-MA) and ranking Republican member Kevin Brady (R-TX) October 27 released the Securing a Strong Retirement Act of 2020. The bill follows the bipartisan model of success that led to the enactment last December of the SECURE Act, balancing provisions sought by consumer groups with changes sought by providers of retirement plan services, and drawing together legislative proposals that have been introduced by members of the Ways and Means Committee.
Key provisions of the bill seek to expand retirement savings coverage, allow Americans to save more and earlier for their retirement. It also makes changes to the Multiple Employer Plan (MEP) provisions that were the centerpiece of SECURE. Among the major provisions of the bill is an expansion of auto-enrollment and auto-escalation by requiring all new plans created to incorporate both features. To encourage plan creation, the bill enriches the startup credit for small businesses, and provides a new credit for employer contributions.
The bill would boost the Saver's Credit to provide a greater incentive to modest-income workers to save for retirement. It would increase the 'catch-up' contribution limit for individuals over age 60 to $10,000. It would increase the age at which individuals must take required minimum distributions from 72, as provided in SECURE, to 75 and exempts individuals with less than $100,000 in retirement savings from having to take minimum distributions.
Among the widely supported proposals included in the bill are provisions that would allow 403(b) arrangements to offer collective investment trusts as an investment option and allow 403(b)s to participate in Open MEPs and allowing employers to match their workers' student loan repayments with retirement plan contributions. One provision of the bill has generated early controversy with respect to the on-going debate over electronic versus paper delivery of plan documents.
Missing from the bill is Chairman Neal's long-standing Auto-IRA/Auto-401(k) plan to expand coverage by mandating that all employers with more than ten employees provide a retirement plan. Also not included is ranking member Brady's proposal to create a new Universal Savings Account.
While the bill is not expected to be considered in this Congress, it is likely to be high on Chairman Neal's priority list next year. Committee staff have invited interested parties to offer comments on its provisions as well as to suggest additional provisions for the committee's consideration. The bill has many provisions in common with legislation introduced earlier in this Congress by Sen. Rob Portman (R-OH) and Sen. Ben Cardin (D-MD).
The bill and a summary are attached.
Securing a Strong Retirement Act of 2020
Section by section summary