New legislation focusing on retirement savings attempts to build on SECURE Act
As you probably remember, last year President Trump signed into law the Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019. The SECURE Act was a far-reaching and bi-partisan effort aimed at increasing access to tax-advantaged accounts and preventing older Americans from outliving their savings. A few of the major components of the SECURE Act included:
- Pushing back the age at which retirement plan participants need to take required minimum distributions from 70 ½ to 72.
- Repealing the maximum age for traditional IRA contributions.
- Allowing individuals to use 529 plan money to repay student loans.
- Allowing penalty-free withdrawals from retirement plans for birth or adoption expenses.
Securing a Strong Retirement Act of 2020
Just last month, Congressmen Richard Neal (D-Mass) and Kevin Brady (R-Texas) introduced the Securing a Strong Retirement Act of 2020. This new legislation attempts to build on the momentum from last year’s SECURE Act to encourage retirement savings. A few highlights of this new bill include:
- Promoting saving earlier for retirement by expanding automatic enrollment in retirement plans.
- Pushing back further the age at which retirement plan participants need to take required minimum distributions from 72 to 77.
- Increasing catch-up contributions for those age 60.
- Treating student loan payments as elective deferrals for purposes of matching contributions.
A copy of the Securing a Strong Retirement Act of 2020 and section-by-section summary of the bill can be found in the attached press release by the Ways & Means Committee:
It is unclear if this legislation will pass next year in a possibly deeply-divided Congress. But it appears there is consensus among both parties to help Americans save for retirement. We will continue to monitor Congress’s progress with this new important piece of legislation.
Brian Beatty is a transactional attorney whose practice involves the representation of clients in the representation of public, private, nonprofit and governmental employers of all sizes in the design, implementation, operation and administration of qualified retirement plans and health and welfare plans.
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ERISALINC provides legal insight, news, and commentary from McAfee & Taft's Employee Benefits & Executive Compensation attorneys.