Three proposed bills in Congress hold the key to advancing 11 of the Insured Retirement Institute’s 30 legislative priorities in 2021.
Today the IRI released its 2021 Federal Retirement Security Blueprint, created to advance policies addressing the challenges and obstacles faced by America’s workers and retirees seeking a secure and dignified retirement.
“Each year, we issue our Retirement Security Blueprint to communicate IRI’s public policy agenda transparently and to constructively engage with policymakers on important issues for America’s workers and retirees,” said Wayne Chopus, IRI president and CEO.
The three bills that, if passed (or combined into a comprehensive retirement reform bill), would go a long way toward accomplishing IRI’s priorities this year are all bills introduced in 2020 that are expected to be reintroduced in Congress this year.
They are the Retirement Security and Savings Act (S. 1431) from Sens. Rob Portman (R-OH) and Ben Cardin (D-MD); the Securing a Strong Retirement Act (H.R. 8696) from House Ways and Means Committee Chairman Richard E. Neal (D-MA) and Ranking Member Rep. Kevin Brady (R-TX); and the Improving Access to Retirement Savings Act (S. 5064) from Sens. Chuck Grassley (R-IA), Maggie Hassan (D-NH) and James Lankford (R-OK).
It should be noted there are several overlapping components of the Retirement Security and Savings Act and the Securing a Strong Retirement Act in particular.
Many expect that these three bills will indeed form the basis of another comprehensive retirement security bill, often referred to as “SECURE 2.0” in deference to 2019’s Setting Every Community Up for Retirement Enhancement (SECURE) Act, building on it by providing additional improvements and enhancements to help workers and retirees achieve their retirement goals.
11 priorities in 3 bills
Specifically, the 11 of IRI’s 30 Blueprint proposals included in the three bills, which would expand coverage, increase retirement savings, preserve income, and simplify and clarify retirement plan rules, are:
- Increase the required minimum distribution age [from 72] to 75 and modernize the RMD rule [a key component of both the Retirement Security and Savings Act and the Securing a Strong Retirement Act].
- Increase automatic enrollment contribution rates [to a default level of 6% as included in the Retirement Security and Savings Act], and enhance automatic plan features [such as contributions escalating 1% per year for 4 years with corresponding employer matching contributions].
- Help employees save for retirement while repaying student loans [component of the Securing a Strong Retirement Act].
- Increase the catch-up contribution limits for Baby Boomers [component of both the Retirement Security and Savings Act and the Securing a Strong Retirement Act].
- Allow broader use of Qualified Longevity Annuity Contract (QLACs) [component of both the Retirement Security and Savings Act and the Securing a Strong Retirement Act].
- Facilitate the use of low-cost ETF investments in variable annuities [component of both the Retirement Security and Savings Act and the Securing a Strong Retirement Act].
- Enhance the start-up tax credit to encourage small business to establish workplace retirement plans [component of both the Retirement Security and Savings Act and the Securing a Strong Retirement Act].
- Authorize the formation of 403(b) for PEPs [component of the Improving Access to Retirement Savings Act].
- Clarify the eligibility period of the retirement plan start-up tax credit for small employers who join MEPs or PEPs [component of the Improving Access to Retirement Savings Act].
- Expand opportunities for military spouses to maximize their retirement savings [component of the Securing a Strong Retirement Act].
- Establish a national, online, lost and found for retirement accounts [component of the Securing a Strong Retirement Act].
Regaining 2019 momentum in 2021
Following the successful effort to enact the SECURE Act in 2019, IRI said it prepared to advocate for additional retirement security legislation in 2020. However, Congress appropriately focused its attention on the global pandemic and the enactment of measures needed to address the health and economic consequences it caused.
IRI pivoted its federal legislative strategy to propose a five-point plan to help retirement savers who may have been negatively affected by the pandemic’s economic fallout. This effort proved to be successful in keeping retirement security on Congress’ agenda, IRI said, culminating in the introduction of the Securing a Strong Retirement Act in the House and the Improving Access to Retirement Savings Act in the Senate. Both measures included most of the IRI plan proposals. Enacting those bills along with the Retirement Security and Savings Act will be IRI’s priority for its 2021 legislative advocacy efforts.
In a broader sense, IRI’s 2021 Blueprint is built on five pillars that the organizations says establishes a foundation to strengthen and enhance the nation’s retirement security:
- Expand opportunities to save for retirement by enhancing access to, and features of, workplace retirement plans
- Facilitate and expand the use of protected, guaranteed lifetime income to produce sustainable income during retirement
- Preserve and promote access for retirement savers to professional financial guidance, education, and information
- Enhance protections to safeguard Americans from financial exploitation and fraud; and
- Maintain and augment the current tax treatment of retirement savings
“IRI’s 2021 Federal Retirement Security Blueprint contains common sense, bipartisan policies to help our nation’s workers and retirees achieve economic equity by strengthening financial security and promoting greater use of protected lifetime income investments that cannot be outlived,” Chopus said.
Retirement plans for cannabis employees?
One other notable priority in IRI’s 2021 Blueprint? Offering workplace retirement plans to employees of legal cannabis businesses. From the Blueprint:
“Congress should enact legislation such as the ‘Secure and Fair Enforcement Banking Act of 2019’(S.1200/H.R.1595- 116th Congress), which would provide protection and insulation from liability for both participants in and institutions offering and administering retirement plans or individual retirement accounts for the employees of cannabis companies who are regulated and licensed by a state.”