Tomorrow the U.S. House Ways & Means Committee will be focusing on a markup of what’s been called SECURE 2.0, legislation that includes a number of key provisions championed by the American Retirement Association.
According to Committee Chairman Richard Neal (D-MA), the committee will begin marking up the legislation on May 5 at 11:00 a.m. ET.
Neal and the Committee’s ranking Republican, Rep. Kevin Brady (R-TX), first introduced the Securing a Strong Retirement Act (SSRA) last October as a sequel to the 2019 SECURE Act. While they have yet to formally introduce the legislation in the new Congress, that bill is expected to form the basis of the May 5 markup.
The October 2020 bill included some 36 provisions addressing everything from expanding coverage and increasing retirement savings to preservation of income, simplification and clarification of retirement plan rules, to technical and administrative provisions. The provisions include:
- modernizing the current family attribution rule that penalizes small businesses in community property states and disproportionately affects women business owners;
- expanding automatic enrollment in retirement plans by enrolling employees automatically in their company’s 401(k) plan when a new plan is created;
- modifying the credit for small employer pension plan startup costs;
- increasing and modernizing the existing Saver’s Credit for contributions to a retirement plan or IRA;
- expanding retirement savings options for non-profit employees by allowing 403(b) plans to join together to offer retirement plans to their employees in multiple employer plans (MEPs);
- allowing a higher catch-up limit to apply at age 60;
- increasing the required minimum distribution age to 75;
- creating a retirement plan matching program to encourage employees to pay off student loans (including a solution that ARA identified about the impact this new retirement plan design feature could have on the ADP test);
- providing a safe harbor for corrections of employee elective deferral failures; and
- reducing the excise tax on certain accumulations in qualified retirement plans.
There are issues of concern in the current draft of the legislation—notably a requirement that at least one participant benefit statement be mailed in a paper format, a step back from the e-delivery regulations that were finalized less than a year ago. To view a summary of SSRA provisions, click here.
The committee will also hold a markup of the so-called “Views and Estimates Letter” to be sent to the Committee on the Budget.
In general, “markup” is the term for the process congressional committees use to formally consider legislation, make changes through amendments, and report the legislation out of committee. The Views and Estimates Letter is an outline of the respective jurisdictional policy items that congressional committees anticipate working on for the coming fiscal year. These letters assist the House and Senate Budget Committees in developing proposed budgets through the budget resolution process.
The May 5 markup will be live-streamed here.