Surprise! Significant bipartisan retirement reform legislation—essentially SECURE 2.0—could make its way through Congress by the end of this week if it gets attached to a still-developing 2022 fiscal omnibus appropriations package—something House leaders are eagerly and actively working to accomplish.
House Ways and Means Committee leaders Rep. Richard Neal (D-MA) and Rep. Kevin Brady (R-TX) told Roll Call recently that they are preparing to move their “Securing a Strong Retirement Act of 2021,” which they passed out of committee last year with 91 co-sponsors, by way of the omnibus package as a way to send it quickly to President Biden’s desk to be signed into law.
Congress is under the gun this week to wrap up fiscal 2022 spending, facing a Friday, March 11 deadline to have a funding deal in place without risking a partial government shutdown or passing another Continuing Resolution.
The CR route is even less appealing this time as lawmakers on both sides of the aisle are eager to attach emergency aid for Ukraine to the package, as well as updating spending levels for the Department of Defense and State Department to boost national security in the wake of the Russian invasion of Ukraine.
The White House last Thursday formally asked lawmakers to attach to the fiscal 2022 spending package $32.5 billion in emergency funds for government response efforts to the Ukraine crisis and the ongoing COVID-19 pandemic.
The House needs to pass the bill by Wednesday because it won’t be in session the rest of the week, with Democrats headed to Philadelphia for their annual legislative retreat. The Senate expects to take the measure up once the House backs it.
Neal and Brady have long worked to advance further retirement reform legislation that builds on the SECURE Act of 2019, and they see attaching it to this must-pass omnibus spending bill as a way to get the bipartisan reforms through Congress without further delay. The original SECURE Act ended up passing as part of an omnibus spending package at the end of 2019.
Brady told Roll Call last week that attaching the retirement bill to the massive spending package is “Plan A,” rather than trying to pass the bill on its own.
“There’s no question, it would move across the floor with more than 400 votes and a lot of momentum, which is another option for us,” Brady told Roll Call. “But obviously with this much bipartisan support, we think it fits (in the omnibus package).”
“I’m looking at options to get this done in the next few days”
Rep. Richard Neal (D-MA)
Ways and Means Chairman Neal said in a brief interview with Roll Call that his goal is to pass the package, which he authored with Brady, imminently. “I’m looking at options to get this done in the next few days,” Neal said. “My intention is to choose the right vehicle and just get it done.”
If not within the omnibus package, Neal said the bill could also advance through a stand-alone floor vote or under suspension of the rules, a way to quickly move legislation that has broad bipartisan support through the House.
Both Neal and Brady told Roll Call they’re readying the retirement bill to pass by making some tweaks to satisfy senators. Sens. Ben Cardin (D-MD) and Rob Portman (R-OH) have their own bill to follow up the 2019 retirement law—the The Retirement Security and Savings Act—which includes many of the same provisions as the House bill.
Per the Roll Call piece, Brady said Ways and Means is working in Senate feedback as they aim to move their measure, describing differences as “really solvable.” He said the committee is primarily working with Senate Finance Committee Chair Ron Wyden of Oregon and ranking Republican Michael Crapo of Idaho, along with other senators who’ve championed specific provisions.
Passing the retirement bills is also seen as a priority because a couple of long-term “champions of retirement security” are set to retire soon. Brady is set to retire at the end of the year, and Portman announced last year that he will not seek reelection when his current term ends in 2022.
What’s in the bills
As a refresher, here’s more about both the House and Senate bills that could be included in the 2022 fiscal omnibus appropriations package.
The Securing a Strong Retirement Act of 2021, along with companion Senate bill the Retirement Security and Savings Act, makes up the vast majority of the co-called SECURE 2.0 retirement reform package.
Among the Securing a Strong Retirement Act of 2021’s provisions:
- Expanding auto–enrollment, auto-escalation
Section 101 requires 401(k) and 403(b) plans to automatically enroll participants in the plans upon becoming eligible (and the employees may opt out of coverage). The initial automatic enrollment amount is at least 3% but no more than 10%. And then each year that amount is increased by 1% until reaching 10%. There are some exceptions.
- Raising the RMD age from 72 to 75
The original SECURE Act raised the age for taking required minimum distributions from 401ks and traditional IRAs from age 70½ to 72; this bill would raise it further to age 75 by 2032 (if the bill passes this year).
- Matching 401k contributions for student loan payments
Another provision would 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.
- Some additional provisions
Provide incentives for small businesses to offer plans; allow for bigger catch-up contributions; increase and modernize the existing federal tax credit for contributions to a retirement plan or IRA (the Saver’s Credit); allowing MEPs for non-profits; create a national online database of lost 401k accounts.
The Retirement Security and Savings Act was introduced May 20, 2021 by Sens. Rob Portman, (R-OH) and Ben Cardin (D-MD). It is widely considered as the companion bill in the Senate to Neal and Brady’s Securing a Strong Retirement Act in the House, with many overlapping provisions.
The Senate bill addresses four major opportunities in the existing retirement system: (1) allowing people who have saved too little to set more aside for their retirement; (2) helping small businesses offer 401(k)s and other retirement plans; (3) expanding access to retirement savings plans, including for low-income Americans without coverage; and (4) providing more certainty and flexibility during Americans’ retirement years. The measure includes more than 50 provisions to accomplish these objectives.
SEE ALSO:
• IRI ‘Optimistic’ Meaningful Retirement Legislation Will Pass in 2022
• 401k-Friendly ‘SECURE 2.0’ Bill Advances in House
• Final Piece of ‘SECURE 2.0’ Puzzle Reintroduced by Portman and Cardin
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.
