As we reported on Friday, the House Ways and Means Committee is holding a mark-up of retirement legislation tomorrow, Tuesday, April 2. The Setting Every Community up for Retirement Enhancement (SECURE) Act of 2019 closely resembles the Retirement Enhancement and Savings Act that has previously been introduced in the House but with one major difference – there is not an open MEP provision. Our understanding is that the open MEP provision will be offered in an amendment during the mark-up.
The SECURE Act does include the nondiscrimination testing provisions for frozen plans that we support and the provisions on lifetime income disclosure that ERIC has been working to modify. As such, we have sent a letter to Chairman Neal urging him to consider a modification to the lifetime income disclosure language that would provide flexibility for plan sponsors and allow participants to receive individualized information. During this mark-up and after, we will continue to work to modify this language.
In addition, the following provisions have been added/modified:
- Stretch IRA – Although included in the original language, we expect modifications. While the focus of this provision is on IRAs, it also impacts 401(k) plans and pension plans in which a retirement benefit might be passed on to a beneficiary. We are still trying to determine the plan sponsor impact and will share additional information as we learn it
- Required Minimum Distribution (RMD) – Expansion of the RMD age from 70.5 to 71
- Long-term/part-time worker retirement coverage
- Provisions from the Family Savings Act which include the 529 expansion (without the unborn child component) and 401(k) distributions for birth/adoption of a child up to $5,000
If you have any questions or concerns, please do not hesitate to contact me.
Article by Aliya Robinson, Senior Vice President of Retirement Policy