Late Friday afternoon, House Majority Leader Rep. Steny Hoyer, D-Md., released the upcoming week’s floor schedule for votes. To the surprise of many, it included H.R. 2954 ‘‘Securing a Strong Retirement Act of 2022.’’
The bill, known informally as SECURE 2.0 and championed by House Ways and Means Committee Chairman Richard E. Neal, D-Mass., and Rep. Kevin Brady, R-Texas, includes several popular and largely bipartisan provisions that supporters say will increase both the number of Americans covered by an employer-sponsored retirement plan, as well as the amount saved.
“Building on the Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019, SECURE 2.0 would further improve workers’ long-term financial wellbeing,” according to information released by Ways and Means Committee.
SECURE 2.0’s proposals include:
No. 1: Increasing retirement savings through automatic enrollment, new incentives, and expanded coverage:
- Promotes saving for retirement earlier by expanding automatic enrollment in 401k and 403b retirement plans
- Creates a new financial incentive for small businesses to offer retirement plans
- Increases and modernizes the existing federal tax credit for contributions to a retirement plan or IRA (the Saver’s Credit)
- Allows Americans to save for retirement longer by increasing the required minimum distribution age to 75
- Makes it easier for military spouses to save for retirement by offering small employers a new financial incentive that boosts retirement plan participation by making military spouses eligible for plan participation quicker, increasing eligibility of matching or nonelective contributions, and making military spouses 100% vested in all employer contributions
- Improves coverage for part-time workers in 401(k) plans
No. 2: Encouraging more flexibility for Americans’ retirement options:
- Expands retirement savings options for non-profit employees by allowing groups of non-profits to join together to offer retirement plans to their employees
- Offers individuals 50 and older the ability to set aside greater savings as they approach retirement
- Permits individuals the choice to pay down a student loan instead of contributing to a 401(k) plan, while still promoting increased retirement savings through an employer match in their retirement plan
- Increases charitable donations permitted through an individual’s IRA
No. 3: Protecting Americans’ retirement accounts:
- Safeguards innocent retirees who unknowingly receive retirement plan overpayments
- Creates a national online searchable Retirement Savings Lost & Found Database at the Department of Labor for workers and retirees to find their lost retirement accounts
READ THE FULL BILL HERE
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of 401(k) Specialist and Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots. Experienced financial services content executive specializing in creative new media delivery. He joined the American Retirement Association in 2023 as Chief Content Officer, overseeing communications for the organization, as well as its sister organizations.