Call it the return of RESA.
On Thursday, outgoing Senate Finance Committee Chairman Orrin Hatch, R-Utah, and Ranking Member Ron Wyden, D-Oregon, introduced a new version of the Retirement Enhancement and Savings Act (RESA)—a bill they say will improve access to retirement savings.
Importantly, the bill makes multiple employer plans (MEPs) “more attractive by eliminating outdated barriers to the use of MEPs and improving the quality of MEP service providers.”
The language notes that MEPs “provide an opportunity for small employers to band together to obtain more favorable pension investment results and more efficient and less expensive management services.”
An update to the “Retirement Enhancement and Savings Act of 2016,” which the committee passed at that time, “would make some much-needed changes to our nation’s retirement system and address the priorities of a number of our members and their constituents,” according to Hatch.
Among other things, the bill would “enhance 401k retirement plans” and make them more accessible by offering startup and automatic enrollment tax credits for small businesses, and will make “common-sense changes” to Individual Retirement Accounts.
It also claims to increase the portability of 401k retirement plans and the “reliability of lifetime income by making it easier for employers to offer annuity contracts.”
The bill seeks to provide legal protection from lawsuits for 401k plan sponsors when offering annuity products from state-supervised insurance companies.
Changes specifically included in the 2018 version include modification to the definition of ERISA fiduciary safe harbor for selection of lifetime income provider, as well as adjustments to effective dates. RESA as originally introduced was generally effective for years beginning after December 31, 2016; these effective dates have been changed to years beginning after December 31, 2018.
Hatch, the longest-serving Republican politician in U.S. Senate history, recently announced his pending retirement. He played a key role in the recently passed tax reform, in addition to sponsoring numerous retirement plan-related proposals, including the push for the “mini-Rothification” of defined contribution plans and limits on stretch IRAs.
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of 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.
The bill seeks to provide legal protection from lawsuits for 401k plan sponsors when offering annuity products from state-supervised insurance companies.
Lobbyists for the insurance companies. They need to be out of the retirement game. Compounding fees are the opposite of compounding interest. Read Warren Buffet and Tony Robbins.