Grassley, Wyden Introduce Updated Retirement Savings Legislation
"Planning for retirement is important, yet challenging. The Retirement and Savings Act would help Americans get on the path of saving for a secure retirement during their working years while making sure their savings will last throughout their retirement. It also would make it easier and more cost-effective for small employers to sponsor a retirement plan for their employees," Grassley said.
"Working families are struggling to save for retirement. To allow workers to start saving as early as possible,
RESA would reform retirement savings laws in several ways, including:
- Improving on an existing type of retirement plan called a "multiple employer plan" or MEP. Such plans would be expanded to make it easier for small employers to join together to sponsor a single retirement plan for their workers. This would help millions of Americans save for retirement, and streamline the plan-administration costs for small businesses;
- Creating a new fiduciary "safe harbor" for employers that offer as part of a defined contribution plan an option for employees to invest in lifetime-income arrangements, such as annuities;
- Enhancing the ability of employees to transfer their retirement plan assets to a new retirement plan when they change jobs;
- Encouraging employees to increase their retirement savings annually through automatic increases in contributions to 401(k) plans and requiring employers to provide estimates of how much an employee's account would provide during retirement if it were invested in an annuity; and
- Continuing to allow an employee to pass a limited amount of an IRA or 401(k) account to a family member or other beneficiary to permit the beneficiary to continue the tax-deferred saving for retirement
Bipartisan work on the Retirement Enhancement and Savings Act of 2019 began in 2006. The
A section-by-section summary of the legislation can be found HERE (https://www.finance.senate.gov/imo/media/doc/RESA%20Summary%204.1.19-banner-converted.pdf).
Text of the legislation can be found HERE (https://www.finance.senate.gov/imo/media/doc/OTT19202%20(002)%20As%20filed.pdf).
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