As the remaining days of 2019 wind down, pressure ramped up this week with repeated calls to get Senate Majority Leader Mitch McConnell to bring the SECURE Act to the Senate floor for consideration (more on that below).
Many surmise the SECURE Act, though it enjoys thorough bipartisan support, is among proposed legislation frozen in the Senate largely as a result of impeachment proceedings in Washington.
Then Thursday on the Senate floor, U.S. Senator Rob Portman (R-Ohio) urged his Senate colleagues to pass the landmark retirement reform legislation, which he noted already passed the House of Representatives nearly six months ago by an overwhelming vote of 417-3.
“That’s right, 417-3. That never happens around here. So this is totally bipartisan,” Portman said during his speech on the Senate floor. “It’s one of these issues where we would have an opportunity to pass it and then send it directly to the president for his signature, and he has said he would sign it.”
Portman, who chairs the Finance subcommittee that handles retirement and pension issues, has been a strong proponent for passing the SECURE Act since the beginning. Right after the House passed it, the SECURE Act missed a shot at breezing through the Senate via “unanimous consent” after a handful of Senators placed “holds” on the bill over various concerns, and it has languished in McConnell’s legislative purgatory since.
A group of Republican Senators tried something different Nov. 7 in an attempt to break the SECURE Act out of that purgatory. Here’s how Portman spoke about it to his colleagues on the Senate floor:
“Today, what is called a ‘live UC’ was tried. It was an attempt to get a vote on the SECURE Act, this legislation I’m talking about, with five amendments on each side. I support that, and I supported my colleagues today who came forward to offer that. The amendments that they outlined as our five Republican amendments all make sense to me, and then to the Democrats we said, ‘you should offer five amendments also. You all pick them.’ Unfortunately it was objected to by the other side, and that didn’t surprise me because for the past five and a half months some of us have been trying to get this legislation done, and there have been concerns on both sides of the aisle. But we’re at a point now where we know, having raised this live UC, that we continue to have this stalemate. And after five and a half months, I think it’s time for us to move forward on these reforms.”
Portman went on to say he liked the amendments the Republicans proposed, but they shouldn’t prevent the SECURE Act from being passed as is.
“As an example, I agree that allowing 529 plans to be used for homeschooling expenses make sense and it’s a reform that Congress should take up. But this underlying bill that almost every Republican in the House supported, even without this provision, is one we also ought to take up,” Portman said. “So as difficult as it is for us to give up on amendments on both sides, if that can’t be done because it gets blocked, then let’s go ahead and move the underlying legislation, the SECURE Act. It’s a worthwhile piece of legislation. It helps in a category where we need the help badly and that’s small businesses.”
- SEE ALSO: Video of Portman’s full remarks can be found here.
His remarks went on to outline the SECURE Act’s benefits for small business, including tax credits for starting a retirement plan and including auto-enrollment, the Open MEPs provision that estimates say would lead to 700,000 new retirement accounts for small business workers, raising the required minimum distribution age to 72, and crucially fixing a glitch that could cause 400,000 to have their DB plan benefits frozen at the end of the year.
“So let’s pass SECURE Act. It’s a bill that does a lot to put us on the right path. Does it do everything? No. Senator Cardin and I have introduced a more comprehensive bill called the Retirement Security and Savings Act. We go further in a lot of these regards we talked about today,” Portman said. “But that’s a bill that will require more hearings and a markup and more consideration. In the meantime let’s do what we can. Let’s provide more certainty, more flexibility and more retirement savings.”
Principal leader shares SECURE Act support
Dan Houston, chairman, president and CEO at Principal, who also serves as the chair of the American Council of Life Insurers, provided the following statement to back up ACLI’s Nov. 5 letter urging McConnell and Senate Minority Leader Chuck Schumer to pass the SECURE Act:
- The SECURE Act and its foundations contain many provisions that will increase coverage, enhance choice, and remove barriers for American savers. We are very supportive of the provisions to establish more flexible multiple employer plans (MEPs), to remove the cap on auto-escalations, to allow for portability of lifetime income options, to establish fiduciary safe-harbors for selection of lifetime income providers, and to repeal the maximum age for Traditional Roth IRA contributions.
- This legislation will contribute to increased access to retirement plans at small businesses – helping the 58% of workers who do not currently have access to a retirement plan that work for a small business. We are advocates of the multiple employer plan, which will offset retirement plan set-up costs, lowering barriers to entry for the employers who say they do not offer plans because of financial cost or lack of organizational resources.
- The establishment of an improved safe harbor provides clarity to the steps employers must take to evaluate and select a provider of a guaranteed income solution for their retirement plan, making it easier for workers to convert their accumulated nest eggs into guaranteed streams of income through their retirement.
- We’re encouraged by the automatic enrollment and automatic escalation tax incentives to encourage more small businesses to incorporate the features in plan design.
- We are hopeful that the Senate will now act and allow this important package of retirement provisions to take the final step to becoming law.
Advisors from all states sign letter
On Nov. 7, financial advisors from all 50 states and the District of Columbia urged U.S. Senate leadership to pass the SECURE Act in a letter to McConnell and Schumer.
“Hopefully, the Senate will listen to the growing chorus of voices nationwide calling for passage of the SECURE Act,” said ACLI President and CEO Susan Neely. “The bill has so much support because it would give millions of Americans more tools to achieve financial security throughout retirement. The time is now for the Senate to put ‘out of many, one’ into action and pass SECURE.”
Earlier in the week, ACLI headed a coalition of 91 business and community leaders that sent a similar letter to McConnell and Schumer urging action.
Will all this week’s “urges” finally lead to Senate action next week? Stay tuned!
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.
