Washington, DC –The ERISA Industry Committee (ERIC) provided testimony to the U.S. House of Representatives Committee on Ways and Means Select Revenue Measures Subcommittee for today’s hearing titled “Tax Relief to Support Workers and Families during the COVID-19 Recession.”
ERIC’s testimony applauded the retirement provisions in the “The Coronavirus Aid, Relief, and Economic Security (CARES) Act” and expressed support for the retirement provisions in the “Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act.” The testimony also encouraged lawmakers to go further in their support of the financial and retirement security of workers and retirees during this unprecedented time, by implementing additional measures. Specifically, ERIC urged passage of the following provisions:
- Funding relief for single-employer pension plans
- Clarification of plan loan provisions included in the CARES Act
- Expanding the required minimum distribution (RMD) rules
- Flexibility for dependent care contributions and flexible spending accounts
“As millions of Americans face an uncertain future in the wake of the economic downfall brought on by COVID-19, lawmakers have a responsibility to help them protect their future retirement security,” said Aliya Robinson, Senior Vice President of Retirement and Compensation Policy, ERIC. “The HEROES Act has the opportunity to provide workers and retirees with that protection and support, and we encourage Congress to implement these critical provisions.”
ERIC also urged the Committee to suspend matching contributions in safe harbor plans, increase the required minimum distribution age to 75, eliminate barriers to allow greater use of lifetime income products, and allow for catch-up retirement contributions for those affected by COVID-19.
Additionally, ERIC asked lawmakers for assistance in securing guidance from the U.S. Department of Treasury and the Internal Revenue Service on issues critical to plan sponsors regarding COVID-19 employee benefits. Those issues include:
- Relief from partial plan termination definitions
- Clarification of participants affected by COVID-19 as defined under the CARES Act
- Refund of dependent care/health FSA deferrals
- Relief on deferrals for commuter benefits
- Clarification of the loan suspension period
- Cessation of 409A Deferrals
“Large employers need immediate guidance on these important benefits issues so that they can fully implement the legislative provisions that are meant to provide important assistance to workers during this critical period,” said Robinson.
Click here to read ERIC’s testimony.