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May 6, 2021

Ways & Means approves 'Securing a Strong Retirement Act'

The House Ways and Means Committee May 5 approved by unanimous voice vote Chairman Richard Neal (D-MA) and ranking Republican member Kevin Brady's (R-TX) "Securing a Strong Retirement Act of 2021" (H.R. 2954), balancing provisions sought by consumer groups with changes sought by providers of retirement plan services, and drawing together bills that have been introduced by members of Ways and Means. As such, there were no amendments offered or approved other than Chairman Neal's substitute.

"We were pleased to work together to enact the SECURE Act last Congress — the most significant retirement legislation to become law in over a decade. While the SECURE Act made significant improvements to our country's retirement system, more needs to be done," Neal and Brady said. "That's why we are pleased to jointly reintroduce this next step, which will help Americans approach retirement with the confidence and dignity they deserve after decades of hard work and sacrifice."

The bill has strong bipartisan support, and Rep. Mike Kelly (R-PA) said he hoped the cooperative effort would be recognized as a positive example of lawmakers working together to help their constituents. Rep. Tom Suozzi (D-NY) expressed a similar sentiment.

Key provisions of the bill include:

  • an expansion of auto-enrollment and auto-escalation by requiring all new plans created to incorporate both features;
  • enriching the startup credit for small businesses, and providing a new credit for employer contributions;
  • boosting the Saver's Credit to provide a greater incentive to modest-income workers to save;
  • increasing the 'catch-up' contribution limit for individuals age 62-64 to $10,000;
  • increasing the age at which individuals must take required minimum distributions from 72 to 75, phased in by 2032;
  • requirement of one paper statement a year;
  • allowing 403(b) arrangements to offer collective investment trusts as an investment option;
  • allowing exchange-traded funds (ETFs) to be made available in individual variable annuities;
  • allowing employers to match their workers' student loan repayments with retirement plan contributions;
  • requiring 'catch-up' contributions to qualified plans to be made in Roth form (catch-up contributions to IRAs are not covered by the provision);
  • allowing employers to make matching contributions to Roth accounts; and
  • allowing SIMPLE and SEP Roth IRAs.

Rep. Jason Smith (R-MO) said he hoped the bill could be modified before floor consideration, possibly with provisions addressing ESOPs. Likewise, Rep. Brian Higgins (D-NY) said he hoped the ESOP Fairness Act, to allow certain qualified over-the-counter securities to be treated as readily traded on an established securities market for the purpose of diversification requirements for employee stock ownership plans, could be included in a manager's amendment prior to floor consideration. Rep. Judy Chu (D-CA) discussed her proposal to make improvements to the Saver's Credit.

A JCT score and description are available here.

Other materials are available here.


Contact Information
For additional information concerning this Alert, please contact:
Washington Council Ernst & Young
   • Any member of the group, at (202) 293-7474.