Retirement Legislation Update – Here We Go Again | Spring 2019 Fiduciary Commentary
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By: Brant Griffin
Retirement Legislation Update – Here we go Again
The most comprehensive changes to the retirement systems since the Pension Protection Act of 2006 is finally gaining momentum in Congress. In April, the House Ways and Means Committee approved the bipartisan retirement legislation the SECURE Act (Setting Every Community Up for Retirement Enhancement Act of 2019). The legislation packages many of the small issues that have arisen since then into a comprehensive bill.
The SECURE Act is the result of a multi-year, bipartisan process and has the support of many key lawmakers. The legislation includes many of the elements of the Senate’s 2018 legislation Retirement Enhancement and Savings Act (or RESA) that was approved by the Finance Committee but never went to a full vote.
The proposal represents a broad effort to expand opportunities for savers. The legislation is a mix of several needed updates to US retirement legislation enhancements to encourage additional retirement savings. The breakdown of the bill’s developments are as follows:
Incentives to adopt an employer-sponsored retirement plan
Promoting lifetime income feature from retirement plans
Other changes to qualified retirement plans
All House tax bills are required to adhere to the pay-as-you-go budget rules. The cost to implement the SECURE Act is offset by the provision to accelerate inherited IRA and retirement plan distributions. This stepping up of taxable distributions is estimated to raise over $15 billion.
There is a significant amount of interest in Congress on retirement security prompting lawmakers to again push through an update to the US retirement system. Features of this legislation have been debated for years and have widespread support among both parties. Politicians on both sides of the aisle have been working on retirement legislation for several years, and the SECURE Act has a real likelihood of passage.