The Chairman of the House Ways & Means Committee in recent remarks indicated that after the SECURE Act is enacted, he may move on legislation that would broadly require employers to maintain a 401(k) or 403(b) plan that covers all eligible employees.
Rep. Richard Neal (D-MA) argued that it is time to get the SECURE Act over the goal line. “There are not many examples of the sort of bipartisanship [we saw] on the SECURE Act that you can look to,” Rep. Richard Neal (D-MA) explained to delegates at the 7th annual NAPA D.C. Fly-in Forum. “The Ways & Means Committee – Democrats and Republicans – voted the legislation out unanimously and when it came to the floor of the House, every Democrat in the House and all but three Republicans voted for the legislation. The House Ways & Means Committee Chairman said, “Given that momentum, there is no reason the Senate can’t take up the legislation,” further noting that he’s confident President Trump would sign it into law.
Citing a need for the SECURE Act, Neal asserted that half of working Americans are not in a retirement plan, and with an average Social Security benefit of about $16,000 per year, that translates to nearly half of American families that only receive Social Security getting about $350 per week. “Making it easier for people to save should be part of our goal,” the chairman emphasized.
Neal further noted that he feels very strongly about mandated savings and advised that after the SECURE Act is enacted, he plans to move on to bigger opportunities. He appeared to be referring to his Automatic Retirement Plan Act (ARPA), which would require employers to maintain a 401(k) or 403(b) plan that covers all eligible employees, while exempting small employers, governments, churches and businesses not in existence for three years. Neal also has previously introduced legislation to require auto IRAs for those employers that do not offer a plan.
The Ways & Means chairman acknowledged that in the past, mandates in general have been a hard sell, but he believes the idea of mandated savings has been met well and there’s a large swath of support for it. The American Retirement Association recently published research that for the first time, quantified on a state-by-state basis the numbers of employers who don’t currently offer a retirement plan at work, and the number of workers – full- and part-time – that could benefit from passage of the SECURE Act.
“The interesting part about retirement savings is to remember that people postpone pay raises along the way for the purpose of their golden years... but that’s under threat everywhere if we don’t act,” Neal said.