Congress is striving to make it easier for U.S. workers to save for retirement, a panel of lawmakers said at this week’s Insured Retirement Institute virtual annual convention.
Lawmakers want to expand on the SECURE Act, which was enacted at the end of 2019. Securing a Strong Retirement Act of 2021 is a follow-up bill to the SECURE Act and is known colloquially as SECURE 2.0. It contains a variety of measures to boost retirement accounts and is heavily supported by industry.
Sen. Mike Crapo, D-Idaho, ranking member of the Senate Finance Committee, said he has been focused on three points when it comes to enacting retirement saving legislation.
- Congress should enact policies that encourage workers to save so they can enjoy a secure retirement.
- Congress should make it easier and cheaper for the smallest business to offer retirement plans.
- Our economy is constantly evolving (for example, people working longer, more people working in the gig economy), so our retirement system must adapt with this changing landscape.
Sen. Ron Wyden, D-Ore., Senate Financial Committee Chairman, discussed the Retirement Parity for Student Loans Act and the Encouraging Americans to Save Act.
The Retirement Parity for Student Loans Act, introduced in May, would permit 401(k), 403(b), SIMPLE and governmental 457(b) retirement plans to make matching contributions to workers as if their student loan payments were salary reduction contributions. This would reduce student loan debt and build retirement savings. Workers could pay off debt while saving for retirement at the same time.
“A lot of young people who might be the first in their family to go to college are up to their eyeballs in debt, and ought to be able to save for retirement while they pay off that debt,” Wyden said.
Wyden is a sponsor of the Encouraging Americans to Save Act, which was introduced in July. The bill enhances incentives to save by restructuring the existing, nonrefundable saver’s credit into a refundable, government matching contribution of up to $1,000 a year for middle- and moderate-income workers who save through 401(k) type plans or IRAs. The legislation also includes a COVID-19 recovery bonus credit that provides up to $5,000 in additional government matching contributions for the first $10,000 saved during a five-year period beginning in 2022.
“I believe there is real opportunity for bipartisan effort on this,” he said. “I think this is an area where we can get broad support. We can get it over the finish line and into law.”
Wyden said Congress needs to “create solutions to increase protection of retirement savings and mitigate the risk of outliving them.”
He also called for legislation that would address portability of workplace retirement benefits, noting that “we know workers believe it’s not their grandfather’s economy anymore where they work at the same place for 30 or 40 years.”
Susan Rupe is managing editor for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at [email protected]. Follow her on Twitter @INNsusan.
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