Senate Finance Committee Chair and Ranking Member, Senator Ron Wyden (D-OR) and Senator Mike Crapo (R-ID) today introduced an updated version of the bipartisan Enhancing American Retirement Now (EARN) Act, which is expected to be included in the final version of the broader SECURE Act 2.0 bill that could reach President Joe Biden’s desk by the end of the year.
“The Finance Committee has worked in a bipartisan way to improve the retirement system, building on our success in 2019. The EARN Act includes policies put forward by members on both sides of the aisle, and I appreciate the collaboration of Senator Crapo every step of the way,” Wyden said in a statement Thursday afternoon.
“Americans deserve dignified retirements after decades of hard work, and our bill is an important step forward. In particular, I’m proud that we are making significant progress for millions of low- and middle-income workers, who are far less likely to have adequate retirement savings. These workers frequently have physical, demanding jobs, and often depend solely on their Social Security income,” Wyden continued. “Too often, they simply do not have resources to last through retirement. Under our reforms, many more workers would access resources for retirement and see meaningful federal retirement contributions year after year. I look forward to working with Senator Crapo and our counterparts in the House to get the EARN Act signed into law.”
The proposals in the EARN Act were unanimously approved (28-0) by the Finance Committee in a markup session in June, and are now being introduced as legislative text.
“The EARN Act expands opportunities for Americans to increase their retirement savings and improves workers’ long-term financial well-being. Every member of the Finance Committee had a hand in drafting this legislation, and the broad range of ideas incorporated into the final bill is a testament to the power of bipartisanship,” said Crapo. “I worked closely with Chairman Wyden to get this bill to a place where it can be formally introduced today, and we will continue to work with our colleagues to push for its passage this year.”
One key provision of the EARN Act would raise the minimum age for required minimum distributions (RMDs) from 72 to 75, but notably, it wouldn’t be effective until the year 2031.
The EARN Act would also encourage small businesses to adopt retirement plans, makes it easier for part-time workers to participate in retirement plans, expands the saver’s credit for low and middle-income workers, and allows penalty-free withdrawals during emergencies and family hardships, like natural disasters, domestic abuse, and terminal illness.
Once the EARN Act is combined with the Senate HELP Committee’s RISE & SHINE Act, which advanced through committee earlier in June, SECURE 2.0 legislation will then need to be reconciled with similar House-passed legislation before a final bill can be voted on by both chambers of Congress and sent to President Biden for signature. The House of Representatives passed its comprehensive retirement bill in March with an overwhelming bipartisan vote.
Full text of the legislation is here.
A section-by-section summary is here.
SEE ALSO:
• SECURE 2.0 Momentum Surges with EARN Act’s Unanimous Committee Approval
• Retirement Industry Leaders, Senators Praise SECURE 2.0 Progress
• What’s Behind ‘SECURE 2.0’ Provision to Boost RMD Age to 75?