From Staff and Wire Reports
Bipartisan legislation to improve retirement savings and income prospects for millions of American workers overwhelmingly passed the House of Representatives today.
A source indicates the Senate could take up the bill tomorrow.
The Setting Every Community Up for Retirement (SECURE) Act is designed to expand access to workplace retirement plans, particularly for small businesses, and will improve the ability for employers to extend greater access to annuity options in those plans.
Rep. Richard Neal, D-Mass., provided a handy breakdown of the bill features.
The measure also requires retirement plans to provide participating workers with an illustration of how much monthly income a retirement savings account might deliver. Additionally, the bill raises the age to begin required minimum distributions from retirement accounts from 70 1/2 to 72.
Roughly 700,000 more U.S. workers will start saving for retirement if the SECURE Act become law, according to an estimate by the American Council of Life Insurers. The measure heads to the Senate, where it also enjoys broad support.
“Americans face a retirement crisis of too little savings amplified by existing barriers that discourage and hamper the ability of small employers to offer a workplace retirement plan,” said Wayne Chopus, president and CEO of the Insured Retirement Institute. “Today’s vote demonstrates how Congress can work together on a bipartisan basis to advance common-sense solutions to help retire the retirement crisis.”
The House action was spearheaded by Rep. Neal, chairman of the House Ways and Means Committee, and the Committee’s Ranking Member, Rep. Kevin Brady (R-Texas). Rep. Ron Kind (D-Minn.) and Rep. Mike Kelly (R-Penn.) also have been leading bipartisan proponents for retirement security legislation.
The Senate has a similar bill under consideration that shares a number of the same provisions as the House-passed legislation. That measure, the Retirement Enhancement and Savings Act (RESA), was approved unanimously by the Senate Committee on Finance in a previous session of Congress.
In a statement to the Senate Finance Committee, ACLI President and CEO Susan K. Neely noted the shift from defined benefit to defined contribution, as well as the expanding longevity that means retirees are living decades now.
"They need to understand how to manage their savings to ensure it lasts their lifetime," she wrote. "Facilitating lifetime income solutions and communicating how retirement savings translate into a guaranteed monthly income benefit empowers and educates participants to make better decisions."