On Capitol Hill today, House Ways and Means Committee Chairman Richard E. Neal (D-MA) and Ranking Member Kevin Brady (R-TX) reintroduced the Securing a Strong Retirement Act of 2021, bipartisan legislation (also known as “SECURE 2.0”) to help more Americans successfully save for a secure retirement.
After a two-hour markup session, the bill, H.R. 2954, was unanimously passed by the committee and advanced to the full House of Representatives for consideration.
This legislation was first introduced in October 2020, and builds on the Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019 to further improve workers’ long-term financial wellbeing.
“Ensuring Americans have the resources they need for a prosperous retirement is a bipartisan priority. We were pleased to work together to enact the SECURE Act last Congress—the most significant retirement legislation to become law in over a decade. While the SECURE Act made significant improvements to our country’s retirement system, more needs to be done,” said Neal and Brady in a joint statement on May 5. “That’s why we are pleased to jointly reintroduce this next step, which will help Americans approach retirement with the confidence and dignity they deserve after decades of hard work and sacrifice.
“The COVID-19 pandemic has only exacerbated our nation’s existing retirement crisis, further compromising Americans’ long-term financial security. In addition to meeting Americans’ most pressing needs now, we must also take steps to ensure their well-being further down the road. With this bill, we build on the landmark provisions in the SECURE Act, enabling more workers to begin saving earlier and giving them peace of mind as they plan for the future.”
The Securing a Strong Retirement Act of 2021 will:
- Promote savings earlier for retirement by enrolling employees automatically in their company’s 401k plan, when a new plan is created;
- Create a new financial incentive for small businesses to offer retirement plans;
- Direct the Internal Revenue Service to promote the Saver’s Credit to increase utilization;
- Expand retirement savings options for non-profit employees by allowing groups of non-profits to join together to offer retirement plans to their employees;
- Allow individuals to save for retirement longer by increasing the required minimum distribution (RMD) age to 75;
- Offer individuals ages 62, 63 and 64 more flexibility to set aside savings as they approach retirement;
- Allow individuals to pay down a student loan instead of contributing to a 401k plan and still receive an employer match in their retirement plan;
- Make it easier for military spouses who change jobs frequently to save for retirement;
- Allow individuals more flexibility to make gifts to charity through their IRAs;
- Allow taxpayers to avoid harsh penalties for inadvertent errors managing an IRA that can lead to a loss of retirement savings;
- Protect retirees who unknowingly receive retirement plan overpayments; and
- Make it easier for employees to find lost retirement accounts by creating a national, online, database of lost accounts.
Neal makes case in opening statement
Chairman Neal opened a markup session on the reintroduced SECURE 2.0 bill Wednesday with an opening statement highlighting the need for the bill’s many provisions, and stressed the importance of its bipartisan nature.
“Last Congress, this Committee had great success in working together to enact the SECURE Act, the most significant retirement legislation to become law in over a decade. Thanks to that legislation, 4 million more Americans now have the opportunity to save at work and an estimated 600,000 to 700,000 new retirement accounts will be formed,” Neal said. “But more work needs to be done. And that’s why I’m pleased that Ranking Member Brady and I have come together to develop H.R. 2954, the Securing a Strong Retirement Act of 2021, or SECURE Act 2.0.”
Neal said working on a bipartisan basis to develop SECURE 2.0 has resulted in an “excellent product that will help Americans plan for their golden years and it has broad support from outside stakeholders from AARP to Edward Jones to the American Red Cross.”
More stakeholder support
John James, Vanguard managing director and head of Vanguard Institutional Investor Group, issued the following statement Wednesday in support of the bill:
“Vanguard commends bipartisan efforts for the reintroduction of the Securing a Strong Retirement Act. This sweeping bill would expand access to affordable investment solutions, provide greater transparency around target-date fund performance, and ease administrative burdens for plan sponsors and participants alike. Ultimately, these changes will enable millions more Americans to save for a secure retirement. On behalf of Vanguard’s retirement savers, we thank Chairman Neal and Congressman Brady for their continued efforts to simplify and broaden Americans’ access to the U.S. retirement system.”
Another stakeholder supporting the bill is the Insured Retirement Institute, which also released a statement today:
“Retirement issues have a bipartisan legacy that continues with the Securing a Strong Retirement Act,” said Wayne Chopus, IRI President and CEO. “We are confident that Congress will act quickly to help more people build economic equity and strengthen financial security to sustain them throughout their retirement years.”
“Chairman Neal and Ranking Member Brady are proven champions of retirement security on behalf of America’s workers and retirees,” Chopus continued, adding that IRI expects it will receive strong support on the House floor. “We look forward to working with House leaders to expedite action on this bill and then work with Senate leaders to pass it and advance it to the White House.”
SECURE 2.0 incorporates a wide variety of retirement reform bills recently introduced by lawmakers from both sides of the aisle.
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