SECURE Act 2.0

Per NTSA, the U.S. House Ways & Means Committee will be focusing on a markup of legislation tomorrow that includes a number of changes impacting private sector pension plans. Here is their list with my emphasis on aspects of most importance to my clients.

Committee Chairman Richard Neal (D-MA) and the Committee’s ranking Republican, Rep. Kevin Brady (R-TX), first introduced the Securing a Strong Retirement Act (SSRA) last October as a sequel to the 2019 SECURE Act. While they have yet to formally introduce the legislation in the new Congress, that bill is expected to form the basis of the May 5 markup. The October 2020 bill included some 36 provisions including: 

  • modernizing the current family attribution rule that penalizes small businesses in community property states and disproportionately affects women business owners;
  • expanding automatic enrollment in retirement plans by enrolling employees automatically in their company’s 401(k) plan when a new plan is created;
  • modifying the credit for small employer pension plan startup costs; 
  • increasing and modernizing the existing Saver’s Credit for contributions to a retirement plan or IRA;
  • expanding retirement savings options for non-profit employees by allowing 403(b) plans to join together to offer retirement plans to their employees in multiple employer plans (MEPs);
  • allowing a higher catch-up limit to apply at age 60;  
  • increasing the required minimum distribution age to 75
  • creating a retirement plan matching program to encourage employees to pay off student loans (including a solution that ARA identified about the impact this new retirement plan design feature could have on the ADP test);
  • providing a safe harbor for corrections of employee elective deferral failures; and 
  • reducing the excise tax on certain accumulations in qualified retirement plans.

One response to this post.

  1. Oh wow, I was hoping to see some more quality legislation from our esteemed Congress, like The Butch Lewis Act 🤬🤮🤬🤮🤬

    Reply

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