Now that the midterms are over and Congress is back in session, the retirement industry is turning up the pressure for action on the so-called SECURE 2.0 retirement reform legislation package currently being ironed out on Capitol Hill.
Roughly 100 different associations and companies have signed on to a pair of letters sent to Congressional leaders calling for action during the lame-duck session that makes up the rest of 2022.
Today, a consortium of 60 organizations and companies including a majority of retirement industry heavy-hitters sent a letter to Senate Majority Leader Chuck Schumer (D-NY), House Speaker Nancy Pelosi (D-CA), Senate Minority Leader Mitch McConnell (R-KY) and House Minority Leader Kevin McCarthy (R-CA), urging the leaders to “take quick action and pass a compilation of retirement provisions known as SECURE 2.0.”
From the letter:
Americans are living longer, and many fear outliving their savings. More importantly, the economic impact of the pandemic, continuing market fluctuations and volatility, a historically significant focus on underserved communities and vulnerable populations, and increasing longevity demonstrate the need for Congress to consider policies to expand access to retirement savings. In 2019, Congress took a momentous step forward when it passed the bipartisan Setting Every Community Up for Retirement Enhancement (SECURE) Act putting more Americans on a path to a secure and dignified retirement. Congress must now act to pass the bipartisan SECURE 2.0 legislation and help more Americans build retirement savings and strengthen their financial security.
SECURE 2.0 includes bipartisan, common-sense solutions to address the anxiety and insecurity workers and retirees have about their retirement security. The components of SECURE 2.0 will encourage more employers to offer opportunities to save for retirement at work, make it easier and less costly for small businesses to offer retirement plans, and help ensure retirement savings last a lifetime. Additional provisions address challenges faced by more vulnerable savers such as part-time workers, military spouses, low-income individuals, and those with student loan debt.
Among the organizations signing the letter are the American Retirement Association, the Insured Retirement Institute, the Investment Company Institute, SIFMA, the SPARK Institute, and companies including Fidelity Investments, Empower, Franklin Templeton Investments, LPL Financial Holdings, State Street, and many more.
Another letter sent today addressed specifically to the four Congressional leaders from the Bipartisan Policy Center specifically prioritized the emergency savings provisions of SECURE 2.0. It was signed by 40 companies and organizations including Aspen Institute, Commonwealth, Consumer Federation of America, National Institute on Retirement Security, SecureSave, the U.S. Chamber of Commerce, and Vestwell, among others.
An excerpt from that letter:
As you deliberate, we urge you to incorporate emergency savings provisions that enable access to tools that help workers build short-term, liquid savings, such as those included in the pair of Senate committee-approved bills. We also encourage you to consider solutions for employees who may not have access to a workplace retirement plan.
As you are keenly aware, American households face widespread financial insecurity, with the lack of short-term “emergency” savings a particularly urgent issue. The rising cost of goods and services has only made the problem more acute and increased the need for tools to help people save for emergencies. Even before the pandemic, 40% of Americans reported that they would struggle to afford a $400 unexpected emergency expense. Today, 1 in 4 households say they have no emergency savings, a figure that is nearly double for those making less than $50,000 a year…
We firmly believe emergency savings policy aligns with the goals of the U.S. retirement system and will help boost financial resiliency for American households. As you collaborate to secure a brighter, stronger economic future for the nation, we stand with you ready to help demonstrate your commitment to ensuring that every worker has the tools and resources they need to weather the next financial crisis, whether personal or national in scope. Together, let’s do right by all Americans.
Busy lame-duck session
While it is widely expected that the bipartisan-fueled SECURE 2.0 bandwagon will plow its way up Capitol Hill and reach President Joe Biden’s desk before the end of the year, it does have to compete with a number of other pressing issues facing Congress with limited time remaining in 2022.
At a news conference Sunday, Schumer warned of a busy lame-duck session, promising “heavy work” and “long hours,” without getting into specifics about the agenda. The No. 1 priority is funding the government with a short-term spending bill passed in September set to expire Dec. 16. A close second figures to be passage of the National Defense Authorization Act, the annual must-pass legislation that sets policy agenda and authorizes funding for the Department of Defense.
The expectation is that SECURE 2.0 will indeed find its way into one of the must-pass spending bills due to its bipartisan support and relative lack of controversy.
During a call with reporters on Tuesday, the American Society of Pension Professionals and Actuaries reported that Senate Finance Committee Chairman Ron Wyden (D-OR) predicted an agreement will be reached between the House and Senate on a final SECURE 2.0 package and that it would be approved as part of a year-end budget deal.
Wyden, one of the key authors of SECURE 2.0, also confirmed on the call that House and Senate lawmakers currently are working to reach an agreement on the differences between the pending retirement bills.
But the retirement industry taking no chances and speaking up to make sure the retirement reforms don’t somehow get lost amid the busy lame-duck agenda.
More calls for action
Yesterday, TIAA issued the following statement from Kourtney Gibson, Chief Institutional Client Officer, calling for Congress to pass SECURE 2.0:
“Earlier this year, Congress took significant steps toward enactment of bipartisan retirement legislation commonly referred to as SECURE 2.0, recognizing the clear need and benefit of these common-sense reforms. During the lame-duck session, this Congress should seize the opportunity for bipartisanship and unity to put Americans and their financial security and well-being first—now and during retirement—by passing SECURE 2.0.
“Americans are confronting the realities of economic uncertainty, high inflation and market volatility. As a result, many retirement savers are worried about whether and when they will be able to retire, and if they will have saved enough to last throughout retirement. Building on 2019’s SECURE Act, SECURE 2.0 will continue the necessary evolution of the U.S. private retirement system, enabling solutions that will provide the help and reassurances needed amid these anxieties, so that more Americans can save for retirement, save enough and protect their nest egg so that it lasts.
“We urge legislators to prioritize the passage of SECURE 2.0, to further safeguard and improve Americans’ retirement outcomes before this year—and this Congress—is over.”
On Nov. 10, Vanguard posted an update on SECURE 2.0 noting it is keeping a particularly close eye on four provisions included in the package:
• Changes to catch-up contributions
• Graduating with student debt
• Automatic savings requirements
• Allowing CITs in 403b plans
SEE ALSO:
• SECURE 2.0 Update: Where It Stands, What’s Likely to be Included
• Portman, Cardin: Get Retirement Reform Done Now
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.
