We knew it was in, but now it’s official—the SECURE 2.0 Act of 2022 is included in the $1.7 billion 2023 omnibus appropriations bill released in the early morning hours Tuesday by Senate Appropriations Committee Chair Patrick Leahy (D-VT).
Happy Holidays retirement industry!
After a couple of days of review for the massive 4,000+ page bill, the Senate is expected to take up the legislation on Thursday, followed by the House on Friday. Because the framework of the bill has already been agreed upon by both Democratic and Republican Congressional leaders, it is expected to pass by the Friday deadline and be the final piece of legislation acted on by this Congress.
If it doesn’t pass, another continuing resolution like the one passed last week would be necessary to avoid a government shutdown.
Senate HELP Committee Chair Patty Murray (D-WA) released a statement Tuesday noting the accomplishment of getting the RISE & SHINE Act provisions she crafted and passed out of the HELP Committee earlier this year included in the SECURE 2.0 Act of 2022.
“I’ve heard from too many people who are struggling to make ends meet and had to raid savings meant for their futures, not to mention countless others who have never had access to an employer-sponsored retirement plan,” Sen. Murray said. “That’s why I fought so hard to make sure the omnibus includes policies to help put families back on solid financial footing like expanding access to retirement plans, increasing transparency on lump sum buyouts from pension plans, helping families save for a rainy day, and more.”
Industry victory lap
Retirement industry associations were quick to applaud SECURE 2.0’s inclusion in the bill, and their relentless efforts played no small part in making it happen.
“We are grateful to the many members of Congress and staff who worked tirelessly to get SECURE 2.0 included in the omnibus legislation expected to be enacted this week.”
ARA’s Brian Graff
In a statement today, the American Retirement Association said it “enthusiastically supports and commends efforts behind the introduction of new legislation that will dramatically improve retirement security for tens of millions of working Americans.”
“We are grateful to the many members of Congress and staff who worked tirelessly to get SECURE 2.0 included in the omnibus legislation expected to be enacted this week,” said Brian Graff, CEO of the ARA. “This important legislation will enhance the retirement security of tens of millions of American workers—and for many of them give them the opportunity for the first time to begin saving.”
The ARA statement noted that over the past two years each of the four Congressional Committees with primary jurisdiction over retirement policy—the House Education and Labor Committee, the House Ways and Means Committee, the Senate Finance Committee and the Senate HELP Committee—passed with unanimous or near-unanimous bipartisan support—significant retirement-related provisions—demonstrating the importance of workplace retirement savings, and its critical role in providing retirement security for the nation’s workers and their families.
Maggie Seidel, SVP, Public Affairs and Marketing at Finseca (FINancial SECurity for All), said the inclusion of SECURE 2.0 in the package was no small feat.
“Our members and government affairs staff have unparalleled relationships with Congressional decision makers and tax writers. Marry that unique role we play with the strong partnerships we have with IRI and ACLI, and this package fortunately got included in the final bill,” Seidel said.
“Including SECURE 2.0 retirement provisions in the last major legislation of the year means that Congress is poised to help millions more workers and retirees with significant improvements to the nation’s private retirement system.”
IRI’s Paul Richman
“This win is further evidence that the work Finseca is doing—speaking with one, unified voice throughout the entire process, as well as the unmatched policy ideas we have to address the retirement savings crisis—produce tremendous results. SECURE 2.0 is a win for holistic financial security professionals across the board—leaders, advisors, brokerage, and everyone in between—and the American people they serve.”
The Insured Retirement Institute (IRI) issued a statement by Paul Richman, Chief Government and Political Affairs Officer, regarding retirement provisions included in an omnibus appropriations measure that was released today:
“Including SECURE 2.0 retirement provisions in the last major legislation of the year means that Congress is poised to help millions more workers and retirees with significant improvements to the nation’s private retirement system. We expect that the legislation will add billions to the retirement savings for small business workers, part-time workers, employees with student loan debt, military spouses, low-income workers, and others. We are reviewing the approximately 100 retirement provisions in the measure with our members to understand the full implications.”
What’s in SECURE Act 2.0
The 100+ provisions in the SECURE 2.0 Act of 2022 are essentially the melding of three separate bills that have been worked on for over a year: the Senate HELP Committee’s RISE & SHINE Act, the Senate Finance Committee’s Enhance Americans Retirement Now (EARN) Act, and the Securing a Strong Retirement Act from the House Ways and Means Committee.
While industry organizations are busy analyzing the text of the bill, Finseca’s Seidel noted the following key provisions that will impact client planning that Finseca was “very pleased” to see included:
• Required minimum distribution (RMD) age increasing to 75;
• Catch-up contribution limits for IRAs increasing;
• Auto-enrollment of employees in new qualified plans;
• Student loan payments can be matched in qualified plans by employers; and
• Improved access to guaranteed lifetime income products, among others.
In its statement today, the ARA singled out the following provisions that could help close the retirement savings opportunity gap for moderate income Americans, particularly among minority groups:
• A Starter 401k—that could provide over 19 million new American workers with access to the workplace-based retirement system through a brand new super-simple safe harbor 401k plan.
• A 100% tax credit for new plans to incentivize the creation of new workplace retirement programs by small businesses.
• A Saver’s Match Program that would incentivize retirement savings by providing a 50% matching contribution on up to $2,000 in retirement savings annually for lower- and middle-income Americans. Over 108 million Americans would be eligible for the Saver’s Match that would be directly deposited into their retirement account—boosting the savings of moderate-income earners.
Here is a link to an extensive section-by-section summary of the SECURE 2.0 provisions.
The full text of the final legislation can be found here, with the SECURE 2.0 Act provisions starting on page 2,046.
SEE ALSO:
• Jake Eigner Talks Final SECURE 2.0 Hurdles and New ESG Rule Impacts
• ‘Billions of Dollars in New Savings’ If SECURE 2.0 Passes: ACLI
• SECURE 2.0 Could Improve Retirement Savings for 100 Million+ Americans: ARA
• SECURE 2.0 Update: Where It Stands, What’s Likely to be Included