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Cardin: The Time for Action on SECURE 2.0 Is Now

Speaking at the 2022 NAPA D.C. Fly-In Forum on July 26, one of the most influential lawmakers on retirement policy urged the delegates to press for action on the SECURE 2.0 legislation—now. 

Sen. Ben Cardin (D-MD), a senior member of the Senate Finance Committee, outlined the possible paths for enactment of the SECURE 2.0 legislation over the coming weeks, explaining that he would prefer to finish it now rather than waiting for a lame-duck session of Congress later this year. 

Why does he believe the legislation should be acted on now? Because you never know what can happen in a lame-duck session, he said. “If I had my preference, I would pass it sooner rather than later; I don’t know how people are going to feel once the midterm elections are completed. It could affect attitudes,” Cardin noted. But either way, the message is clear: get it done, he added. “We’re ready to move. We’re ready to act. We’ve got to find a way,” stated Cardin. 

And for that to become a reality, the importance of getting it done needs to be elevated, Cardin told the delegates. “Your presence is so critically important to raise the importance of getting this bill done before Congress adjourns this year so that we don’t lose the momentum that has been unprecedented in passing a major pension reform bill.” Cardin spoke to the delegates one day before they were heading to Capitol Hill offices to meet with congressional leaders and staff to advocate for passage of the SECURE Act 2.0, among other legislative priorities of the American Retirement Association.

The Path Forward

The good news, according to Cardin, is that the Senate Health, Education, Labor and Pensions (HELP) Committee has already marked up legislation that is compatible with the Senate Finance Committee version. Moreover, the House of Representatives has already passed its version, allowing the Senate to move forward without having to worry about any so-called “blue slip” issues stemming from the fact that all revenue-related legislation must originate in the House. 

Cardin noted that those in the Senate have been working closely with House Ways & Means Committee Chairman Rep. Richard Neal (D-MA) and ranking member Rep. Kevin Brady (R-TX) in developing the legislation.

Addressing the legislative path to enactment, Cardin explained that it could pass as a separate bill in the Senate, but floor time is “hard to come by” these days. The legislation also could be packaged with a must-pass appropriations bill or a temporary continuing resolution to fund the federal government that will pass sometime before the start of the fiscal year, which begins October 1. Congress also could include the retirement legislation in an end-of-year lame-duck session that deals with various expiring tax provisions and other funding provisions that have to be passed before Congress adjourns, such as was the case with the SECURE Act in 2019. 

Key Differences

Cardin noted that there are some differences among the various bills, but added that he didn’t believe there was anything “radical” that couldn’t be worked out. 

One of those key differences is that the Senate Finance bill includes the ARA-supported Starter 401(k), while the House bill does not. Speaking at the Fly-In Forum on July 27, Sen. John Barrasso (R-WY), a cosponsor of the legislation in the Senate, touted the strong potential of the legislation to boost retirement savings access. 

In addition, the House bill includes a requirement for new DC plans to automatically enroll participants, while the Senate Finance bill does not. However, the Senate HELP Committee’s RISE & SHINE Act does include a provision to require plans that offer an automatic enrollment arrangement to automatically enroll participants who have opted out at least once every three years, unless they make a new election to opt out. 

There are also differnces in how the House and Senate bills would enhance the Saver’s Credit (increasingly referred to as the “Saver’s Match”). While the House would streamline the credit by creating one credit rate, the Senate Finance bill would make the credit refundable, in essence, turning it into a government matching contribution that must be deposited into a taxpayer’s IRA or retirement plan. 

Another key difference is the approach taken with emergency savings and withdrawals between the two Senate bills. While the House bill does not include an emergency savings component, the Senate HELP Committee would establish pension-like emergency savings accounts, and the Senate Finance Committee would permit one emergency distribution per year up to $1,000. The taxpayer would have the option to repay the distribution within three years and could not take another emergency distribution within that three-year period unless the amount is repaid. 

Sen. Portman Honored

Cardin also paid tribute to his longtime colleague, Sen. Rob Portman (R-OH). “We’ve worked together over a long period of time and I respect greatly his commitment to public service. Although we may disagree on some philosophical issues, the two of us have a personal relationship that I think has been able to produce results. And I thank him for his public service,” Cardin stated. 

Portman is retiring at the end of this session and the two have worked together for more than 25 years on retirement policy legislation. Portman (at center in the photo) was presented with the American Retirement Association’s inaugural Retirement Visionary award at the NAPA D.C. Fly-In Forum by ARA Chief Government Affairs Officer Will Hansen (at left) and NAPA Past President Jeff Acheson (right).

The fact that Portman, along with Rep. Brady, are retiring at the end of the session could also add some momentum to efforts to enact the legislation.