Congress Closes In On Retirement Security Legislation

As a pair of retirement security bills advance through Congress, optimism is growing that a bipartisan agreement could be in the offing.

The Senate Finance Committee is holding a hearing this morning on “Challenges in the Retirement System.”

Last month, the committee chairman, Sen. Chuck Grassley, R-Iowa, and ranking member, Sen. Ron Wyden, D-Ore., introduced the Retirement Enhancement and Savings Act (RESA). The bill is similar to a House bill, the Setting Every Community Up for Retirement Enhancement Act of 2019, or SECURE Act, that unanimously passed out of the House Way and Means committee last month.

The House is expected to vote on the SECURE Act before a Memorial Day recess period.

The bills contain a number of measures, from boosting the use of annuities to permitting small employers to team up on retirement plans – known as Multi-Employer Plans, or MEPs.
Industry trade groups are enthusiastically backing both bills.

The Insured Retirement Institute submitted a written statement to the Finance Committee expressing strong support for RESA and urging senators to quickly advance the measure and then begin working with the House to approve a final version for the president’s signature.

“The House and Senate legislation are close to identical and both chambers would likely need only a short time to work together to resolve their differences and finalize a bill for the president,” said Wayne Chopus, IRI president and CEO.

Meanwhile, members from the National Association of Insurance and Financial Advisors are in Washington, D.C. today urging Congress to enact the SECURE Act.

Not Much Of An Opportunity

Insurance executives fielded questions on the proposed changes during first quarter earnings calls with Wall Street analysts. Some were eager to see passage of the legislation and expanded markets for annuities.

“We really believe that it's in the best interest of Americans to have this kind of income guarantee available to them moving forward,” said Renee Schaaf, president of retirement and income solutions for Principle Financial. “We're excited not only about the open MEPs, but also about the ability to provide that higher through retirement solution to the U.S. worker.”

Other executives are unsure about the potential impact on their businesses. John Matovina, president and CEO of American Equity, questioned whether the changes will accomodate prominent annuity features.

“One of the key elements of an accumulation annuity is the surrender charge period, which facilitates our investment horizon,” he explained. “And if they're going to allow that type of approach in those plans, there's perhaps an opportunity there.

“But if they're going to look for annuity products and annuities that have a similar-type liquidity features as do the securities and mutual funds that are already in retirement plans, I just don't view that as much of an opportunity.”

InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected].

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InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected]. Follow him on Twitter @INNJohnH.