June 23, 2022
Senate Finance approves retirement bill
The Senate Finance Committee June 22 approved by a unanimous 28-0 vote the Enhancing American Retirement Now (EARN) Act, intended to be folded into 'SECURE 2.0' retirement legislation. The Committee voted to incorporate an amendment to limit the tax benefits of conservation easements. Many of the bill's provisions tracked proposals first introduced by Senators Ben Cardin (D-MD) and Rob Portman (R-OH), who crafted the retirement section of EGTRRA more than 20 years ago as House members and were praised by other Senators for their many years of bipartisan work on retirement and pension issues.
Like the bill passed by the House March 29, the EARN Act includes provisions on 403(b) multiple employer plans, part-time workers, treating student loan payments as elective deferrals eligible for employer matching payments, and insurance-dedicated exchange-traded funds. While the House bill would increase catch-up contributions to $10,000 ($5,000 for SIMPLE plans) between ages 62-64, the Senate Finance bill would permit participants to elect to contribute the additional amount between ages 60-63. Both bills would also increase the age for required minimum distributions from 72 to 75 and remove required minimum distribution barriers for life annuities.
Additional information is available in the attached Tax Alert.
Enhancing American Retirement Now (EARN) Act