May 3, 2021
Ways & Means to consider 'Securing a Strong Retirement Act'
House Ways and Means Committee Chairman Richard Neal (D-MA) and ranking Republican member Kevin Brady (R-TX) May 3 reintroduced the Securing a Strong Retirement Act of 2021. The bill follows the bipartisan model of success that led to the enactment of the SECURE Act in December 2019, 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 Ways and Means. The Committee will mark up the bill on Wednesday, May 5 (at 11 a.m.).
Key provisions of the bill seek to expand retirement savings coverage and 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.
Revenue provisions are kept within the pension realm and relate to expansions of Roth-type savings. Roth accounts involve participants making after-tax contributions, but qualified withdrawals are not taxable. Under the bill, 'catch-up' contributions to qualified plans must be made in Roth form — catch-up contributions to IRAs are not covered by the provision. In addition, employers would be allowed to make matching contributions to Roth accounts. Finally, the bill would allow SIMPLE and SEP Roth IRAs. The total revenue raised by the provisions is approximately $27 billion.
The bill is attached below.
Securing a Strong Retirement Act of 2021