Analyst: Congress has four weeks to deliver a SECURE 2.0 bill

The financial services industry is putting the full press on Congress to pass SECURE 2.0 – but it might depend on whether lawmakers can stop fighting long enough to fund the government.

By far, the dominant issue for the lame-duck Congress over the next six weeks will be the 2023 budget and looming debt ceiling showdown, said Brad Campbell, partner at Faegre Drinker law firm.

But provided a deal can be reached by the Dec. 16 deadline – no small feat given the division that exists in Congress – the SECURE 2.0 legislation could get tacked on and passed before time runs out, Campbell said during a Thursday webinar.

"It appears at this point that [lawmakers] probably are going to try to come to a longer term spending deal," Campbell said. "That would be the vehicle that [SECURE 2.0] would get attached to, but they still have to finish the work of writing it. Then they have to have the political stars line up properly to be able to attach it to that bill, and not have some other big picture, political arguments derail things."

When they could not agree on 2023 appropriations, lawmakers opted for a Continuing Resolution funding the government at 2022 levels. That temporary spending bill expires Dec. 16. Congress can extend the CR into next year or try to reach a longer-term budget deal, which Democrats favor since they are ceding control of the House to Republicans.

'Expand access'

Whatever happens between now and the end of the 117th Congress, the financial services industry is trying hard to make sure members are aware of SECURE 2.0. A group of more than 60 organizations and companies sent a letter to Congress last week urging leaders to bring the legislation to a vote.

"Americans are living longer, and many fear outliving their savings," the letter reads. "More importantly, the economic impact of the pandemic, continuing market fluctuations and volatility, a historically significant focus on underserved communities and vulnerable populations, and increasing longevity demonstrate the need for Congress to consider policies to expand access to retirement savings."

The House passed the Securing a Strong Retirement Act of 2022, known as SECURE 2.0, on March 29 with overwhelming support. The Senate followed up with two different versions. While the House and Senate versions differ in the details, both would expand retirement savings for workers. For older workers, the plans would accelerate catch-up contributions into retirement plans.

SECURE 2.0 could include 49 provisions aimed at simplifying and further encouraging the establishment of retirement savings plans. Items in one or more of the bills include:

• An automatic enrollment requirement for 401(k) and 403(b) plans.
• A phased-in increase in the age when the required minimum distributions begin, from the current age of 72 to age 75 by 2033.
• An increase in catch-up contribution limits for people ages 62-64.
• The ability to count student loan payments as plan contributions eligible for the employer match.

Campbell put passage of SECURE 2.0 at 60-40 in favor.

"I think we have a good chance of getting a final bill here," he said. "But we still don't yet know what would be in it. And we still don't have a guarantee that it's going to happen."

If it doesn't get passed in December, SECURE 2.0 would likely come back in the 118th Congress, Campbell said.

"But it probably takes much of next year to get back to a point of having a bill that's likely to pass," he cautioned. "So our opportunity to get this done in the near term really is basically the next four weeks."

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.

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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.