July 29, 2021
Senate Finance Committee holds retirement hearing
The Senate Finance Committee July 28 held a wide-ranging hearing, "Building on Bipartisan Retirement Legislation: How Can Congress Help," that included discussion of the developing SECURE 2.0 package, expanding auto enrollment, allowing penalty-free retirement withdrawals for emergencies, expanding the Saver's Credit, and helping workers recover lost retirement plan accounts.
In an opening statement, Chairman Ron Wyden (D-OR) referenced a recent press report of a multibillion-dollar IRA and said, "It's clear to me that this is another case of double-standard economics. The system doesn't do nearly enough to help working people of modest means get ahead, but individuals at the top are able to game the rules to abuse taxpayer-subsidized accounts with their pricy accounts and lawyers." Wyden sponsors the Encouraging Americans to Save Act (S. 2452) that would expand and enhance the existing Saver's Credit by turning it from a tax credit into a government matching contribution of up to $1,000 per year.
Ranking Member Mike Crapo (R-ID) said the Committee can credit progress on the retirement issue to the leadership of Senators Rob Portman (R-OH) and Ben Cardin (D-MD), who have introduced the Retirement Security and Savings Act (S. 1770). He said the range of ideas to improve retirement savings is important, but he is focused on enacting policies to encourage savings, lowering plan administration costs, and adapting the retirement system to a modern economy that includes gig workers. Crapo cited ESOPs as an especially helpful tool in promoting retirement security.
In addition to the Portman-Cardin bill, there is the Ways and Means Committee-approved Securing a Strong Retirement Act (H.R. 2954), by Chairman Richard Neal (D-MA) and ranking Republican member Kevin Brady (R-TX), which balances provisions sought by consumer groups with changes sought by providers of plans.
Statements and testimony are available here.
Additional information is available in the attached Tax Alert.
Senate Finance retirement hearing