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COLLECTED WISDOM™ on Legislative Items Impacting Retirement Plans

A directory and index of articles that review what is happening in Congress and Washington DC.

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Bill Would Allow Tax-Free 401k Withdrawals to Buy Long-term Care Insurance

A bill currently being discussed in Congress would allow retirement savers to tap assets held in 401k plans and individual retirement accounts tax-free to buy long-term care insurance, with the aim of making the insurance more affordable and potentially driving down premiums for customers.

Source: Investmentnews.com (registration may be required), November 2019

Legislation Would Allow 401k Withdrawals to Pay LTC Premiums

An influential U.S. Senator is preparing legislation that would allow tax- and penalty-free withdrawals to pay for long-term care insurance. The draft legislation that will be introduce in the coming weeks would also allow up to $2,000 in withdrawals annually per individual to be excluded from income tax, provided the amount is used to pay for qualified LTC insurance for the individual, their spouse or a dependent.

Source: Napa-net.org, November 2019

EBSA Reorganization May Bring Positive Changes

A group of seven Republican senators is urging the Senate Majority Leader to act on one of the most consequential pieces of retirement security legislation in more than a decade. "We encourage the Senate to take action on the SECURE Act as soon as possible. Doing so would demonstrate to our constituents that the Senate can lead in a bipartisan way for workers saving for retirement, for tax fairness, and for family financial security," says the Oct. 15 letter.

Source: Planadviser.com, October 2019

Senators Call for Passage of SECURE Act ASAP

A group of seven Republican senators is urging the Senate Majority Leader to act on one of the most consequential pieces of retirement security legislation in more than a decade. "We encourage the Senate to take action on the SECURE Act as soon as possible. Doing so would demonstrate to our constituents that the Senate can lead in a bipartisan way for workers saving for retirement, for tax fairness, and for family financial security," says the Oct. 15 letter.

Source: Napa-net.org, October 2019

Two New Executive Orders Promise to Impact Retirement and Health Plan Guidance

On October 9, 2019, President Trump signed two executive orders that will likely have the potential to materially impact how the Department of Labor's Employee Benefit Security Administration, the Department of the Treasury, the Internal Revenue Service, and other agencies regulate retirement and health plans.

Source: Groom.com, October 2019

DOL Shake-Up Touted as a Plus for Industry

A new labor secretary and a reorganization within the Employee Benefits Security Administration could lead to increased guidance and a more uniform enforcement policy, said several attorneys who specialize in ERISA-related matters and retirement industry stakeholders.

Source: Pionline.com, October 2019

Government Fixes for the Retirement Problem

Companies want their older employees to afford a timely, secure retirement. That's not simply altruism: such workers tend to be highly paid, consume more health care, and miss work more often than others, and block the upward mobility of younger high achievers who may become frustrated and leave the company. While effective solutions to that cause may elude retirement plan-sponsoring companies, Congress is now positioned as their ally, with pending legislation that would do much to make it easier for people to retire on time.

Source: Cfo.com, October 2019

Warren Labor Proposal Targets ERISA Preemption, Fiduciary Rulemaking

The presidential candidate released a 14-page proposal on Oct. 3, "Empowering American Workers and Raising Wages," that essentially calls for restoring worker protections and labor union rights by "returning power to working people." The proposal singles out the Department of Labor's conflict-of-interest rule that was vacated last year by the 5th U.S. Circuit Court of Appeals.

Source: Asppa.org, October 2019

House-Approved Bill Preventing 'Forced' Arbitration Could Impact Retirement Plans

Many retirement plans include provisions requiring employees and plan participants to arbitrate any disagreements they may have with the employer or plan fiduciaries before they could take a dispute to court to seek resolution. However, the Forced Arbitration Injustice Repeal Act (H.R. 1423) approved Sept. 20 by the U.S. House of Representatives would prohibit pre-dispute arbitration agreements from being valid or enforceable if they require arbitration of an employment, consumer, antitrust or civil rights dispute. As such, it appears that the legislation, if enacted, would apply broadly to employee benefit plans, including DC and DB plans.

Source: Ntsa-net.org, September 2019

Scalia Nomination Heads to Senate

Eugene Scalia, President Trump's nominee to head the Labor Department, was approved Sept. 24 by the Senate Health, Education, Labor and Pensions Committee. The full Senate will now vote on his nomination, though a date has not yet been set.

Source: Napa-net.org, September 2019

Scalia Pressed Over Fiduciary Rulemaking, Multiemployer Funding

Nominated to serve as Secretary of Labor, Eugene Scalia addressed numerous questions Sept. 19 about his past record representing various employer interests, as well as whether he would recuse himself in the forthcoming revamp of the DOL's conflict of interest rule. Scalia's comments came during a three-hour hearing before the Senate Health, Education, Labor and Pensions (HELP) Committee.

Source: Asppa.org, September 2019

SECURE Retirement Legislation on Hold in the Senate

Congress will soon be returning to Washington from its summer recess. The question for those interested in retirement policy is whether pension reform will finally move forward this year. The answer will depend on whether several key senators agree to lift the "holds" they have placed on the legislation.

Source: Truckerhuss.com, August 2019

Two Reasons SECURE Act Is Still Stuck in the Senate

As Congress prepares to return from its August recess, it remains to be seen whether the bipartisan retirement reform bill passed nearly unanimously by the House in May will ever hit the Senate floor. Here are the two biggest hurdles it faces.

Source: 401kspecialistmag.com, August 2019

Lawmaker Makes Another Attempt to Push for National Auto-IRAs

In an effort to close the retirement plan coverage gap, U.S. Senator Sheldon Whitehouse introduced legislation designed to help millions of Americans save for a financially secure retirement through an automatic payroll deduction Individual Retirement Account, or Auto-IRA.

Source: Planadviser.com, August 2019

Senator Introduces "Automatic IRA Act of 2019"

Sen. Sheldon Whitehouse has introduced the Automatic IRA Act of 2019 (S. 2370). The legislation would mandate that most employers that do not offer their employees another type of retirement plan, establish an automatic enrollment, payroll deduction program with contributions withheld from employee pay and contributed to an IRA or retirement bond. The legislation is intended to address the lack of a workplace retirement savings program for many private sector employees.

Source: Ascensus.com, August 2019

The SECURE Act and Guaranteed Retirement Income in Plans

By now you have probably seen a number of articles about the SECURE Act and its safe harbor for guaranteed retirement income in 401k plans. Some have favored the safe harbor, while others have criticized it. In either case, the authors appear to contemplate that participants will be buying individual annuities at retail prices. Fred Reish writes here, "in my opinion, those articles -- on both sides of the fight -- are at best misleading and in some cases just plain wrong. I am writing this article to give you my views."

Source: Fredreish.com, August 2019

How Will the SECURE Act Would Impact 401ks?

While 401ks are one of the most common retirement savings plans, there are still a lot of American workers who do not have access to a 401k or do not have any significant retirement savings. A new bill has passed the House that intends to increase access to retirement savings and accommodate older workers.

Source: Bsllp.com, August 2019

SECURE Act Changes That Affect Your 401k

The SECURE Act changes would alter the way 401k plans operate in significant ways by changing the rules affecting coverage, distributions and participant disclosures and by opening up the market for multiple employer plans covering unrelated employers. All sponsors of 401k plans will need to understand their impact. Here are some of the significant changes to expect if this law is enacted.

Source: 401ktv.com, June 2019

New 401k Legislation Drives Optimistic Outlook for MEPs

How do we get a flat 401k market moving again? It's a question asked and answered by global research and consulting firm Cerulli Associates. The firm is looking hard at open MEPs as a catalyst for DC development, a space it says is mature and experiencing flat to negative growth. current legislative proposals, aimed at expanding retirement plan access for small business employees, will reduce or eliminate the "common nexus" requirement with their support of open MEPs.

Source: 401kspecialistmag.com, June 2019

What the SECURE Act Could Mean for Businesses

Congress is coming tantalizingly close to making it simpler, easier and less costly for small-business owners to provide retirement plans for their employees, extending the prospect of retirement security to millions more Americans. The SECURE Act represents a comprehensive effort to enhance retirement security. This article addresses a handful of key provisions within the legislation that could make a difference in encouraging more businesses to offer retirement plans.

Source: Massmutual.com, June 2019

Bipartisan Bill Pavest the Way for Significant Retirement Plan Reforms

The House recently passed the most significant piece of proposed retirement plan legislation in more than a decade: the SECURE Act. Although the Senate must also approve the bill before it becomes law, its proposed changes have considerable bipartisan support in Congress. Plan sponsors should start considering how changes included in the SECURE Act could impact their retirement plans. Employers who do not currently offer retirement plans should also review the new retirement plan incentives included in the proposed legislation.

Source: Mwe.com, June 2019

Congress Looks to Overhaul Retirement System

Congress looks to overhaul retirement system for first time in more than a decade. On May 23, the House of Representatives took its first step toward expanding workers' retirement security by overwhelmingly passing the Setting Every Community Up for Retirement Enhancement Act of 2019. This is the first significant retirement bill taken up by Congress since 2006's Pension Protection Act.

Source: Lockton.com, June 2019

House Passes the Secure Act Which Moves to Senate, Would Affect 401k Plans in Big Ways

Should the proposed legislation become law, it could represent the most significant pension legislation since the Pension Protection Act of 2006. In its current form, the SECURE Act is an amalgamation of a number of pension-related proposals that have been offered on and off during the course of the past several years. This article reviews the major provisions that apply directly to 401k plans.

Source: Compliancedashboard.net, June 2019

Sweeping 403b Changes in Portman-Cardin Legislation Leaves Unanswered Questions

The Portman-Cardin Bill, the Retirement Security and Savings Act - 2019, introduces sweeping changes to 403b plans by expanding their investment universe. These changes, however, also required modification to the Securities Laws otherwise applicable to 403b plans in order for them to work. A few critical issues have gone unanswered in the legislation, and there are a number of transition issues which we will have to be addressed.

Source: Businessofbenefits.com, June 2019

House Bill Makes Significant Changes to Retirement Plans

The U.S. House of Representatives overwhelmingly passed the "Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019" (H.R. 1994) by a vote of 417-3. The bill makes numerous changes affecting employer-provided retirement plans as well as individual retirement accounts and other tax-favored savings accounts.

Source: Bradley.com, May 2019

SECURE Act: Key Changes for Plan Sponsors and Employers

The U.S. House of Representatives passed the "Setting Every Community Up for Retirement Enhancements (SECURE) Act of 2019." To become law, the bill still needs to be passed by the Senate and signed by the President. Because there appears to be bipartisan support, there is a chance that some form of the SECURE Act could be signed into law. The SECURE Act contains several provisions that would significantly change qualified retirement plan design and operation. Below is a summary of some of the key changes that will affect plan sponsors.

Source: Natlawreview.com, May 2019

House Passes Bipartisan Retirement Reform Legislation

On May 23, the House overwhelmingly passed the "Setting Every Community Up for Retirement Enhancement Act of 2019" on a vote of 417-3. Its passage marks significant progress for retirement legislation after years of negotiations among lawmakers and various retirement industry groups. However, the bill still faces hurdles in the Senate that could delay or prevent enactment.

Source: Groom.com, May 2019

Eight Major Ways the SECURE Act Could Impact Your Retirement Plan

SECURE Act passed in the House with a 417-3 vote and is expected to make it through the Senate during this current term. The first real movement of the year which may affect your retirement plan. While the bill has essentially 29 new provisions or major changes, this article focuses on eight of them.

Source: Forbes.com, May 2019

House Passes the SECURE Act

In a 417-3 vote, the U.S. House of Representatives passed the "Setting Every Community Up for Retirement Enhancement Act," which would significantly overhaul current legislation governing retirement plans. The bill was approved with broad bipartisan support. It must be passed by the Senate and signed by the President before it becomes law.

Source: Ascensus.com, May 2019

Senators Call for Creation of Federal Retirement Commission

Bipartisan legislation to create a new federal commission that would study and recommend ways to improve Americans' retirement security has been reintroduced in the Senate.

Source: Ntsa-net.org, May 2019

New Bill Links 401k Matches to Student Loan Payments

A bill that includes a provision to make it easier for companies to contribute to the retirement accounts of employees who are paying down student debt was reintroduced in the Senate this week.

Source: Investmentnews.com (registration may be required), May 2019

Legislation Paves Way for Retirement Match on Student Loan Repayments

A key member of Congress has reintroduced legislation that would permit 401k, 403b, SIMPLE, and governmental 457b retirement plans to make matching contributions to workers as if their student loan payments were salary reduction contributions.

Source: Napa-net.org, May 2019

New Bill Means Major Increase in RMD Age

Four-and-a-half years is pretty significant in your 70s, but that's how much longer seniors could wait to take required minimum distributions under a new Senate bill. The Retirement Security & Savings Act would increase the age for required minimum distributions to age 75 by 2030.

Source: 401kspecialistmag.com, May 2019

Senate Finance Committee Takes Aim at Retirement System Challenges

Sen. Charles Grassley, Chairman of the Senate Finance Committee, has announced that the Committee will hold a hearing entitled "Challenges in the Retirement System" on Tuesday, May 14 at 10:15 a.m. ET. This will be the first retirement policy hearing held by the Finance Committee for the 116th Congress since Sen. Grassley reclaimed the chairmanship, after previously serving as chair during much of the last decade, including when the Pension Protection Act of 2006 was signed into law.

Source: Napa-net.org, May 2019

New Bill Provides Plan Sponsors Opportunity to Provide 401k Match on Student Loan Repayments

If your organization has hired anyone who has graduated from higher education in the recent past, you're probably aware that they are much more concerned with paying off high-interest student loans than saving for a far more distant retirement. Indeed, interest rates on student loans are so high in some cases it doesn't make financial sense to save at a lower interest rate, even if your business has a tax-advantaged 401k program that invests in excellent mutual funds. This is a concern over benefits that HR organizations need to address in order to attract the next generation of top-level applicants.

Source: Hallbenefitslaw.com, April 2019

Sixteen Retirement Plan Provisions in the SECURE Act

Employee benefits consulting firm Strategic Benefits Advisors helpfully -- and succinctly -- lists the provisions of the bipartisan Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019, which was advanced by the House Ways and Means Committee on April 2.

Source: 401kspecialistmag.com, April 2019

Impact of Executive Order on ESG, Proxy Voting May Be Muted

The White House issued an executive order on the evolving topic of proxy voting and environmental, social and governance investing programs being put into practice by retirement plans subject to ERISA. One ERISA expert says fiduciaries already evaluating ESG risks and those being active in proxy voting will continue parsing whatever ad hoc disclosures are volunteered by companies.

Source: Planadviser.com, April 2019

A Step Forward for Retirement Legislation

There is a significant amount of interest in Congress in retirement security, and lawmakers on both sides of the aisle have been working on a legislative package for a number of years. The SECURE Act's prospects for enactment in this Congress are good as it is the result of a multi-year, bipartisan process and has the support of many key lawmakers.

Source: Groom.com, April 2019

Novel Retirement Program Proposed

Lawmakers in the U.S. Senate and House of Representatives have jointly introduced the "Saving for the Future Act," which is legislation modeled on the United Kingdom's National Employment Savings Trust (NEST) program.

Source: Ascensus.com, April 2019

Senate Committee Eyes Lack of Guidance on ERISA Cybersecurity

There is no definitive answer to the question of whether the sponsor of a benefit plan is subject to the fiduciary standards of ERISA with respect to implementing cybersecurity measures to protect participants' financial data. Acknowledging a complete lack of guidance, a Senate committee sent a letter to the U.S. Government Accountability Office requesting guidance from the GAO on issues related to cybersecurity and the private retirement system.

Source: Truckerhuss.com, April 2019

Bipartisan Retirement Reforms Pass Key House Panel

An array of retirement reforms unanimously passed April 2 by the House Ways and Means Committee would offer nondiscrimination testing relief to closed pension plans, promote defined contribution (DC) multiple-employer plans, seek to spur 401k savings, and encourage lifetime income options in DC plans, among many other proposals.

Source: Mercer.com, April 2019

Congress Makes Headway on Retirement Legislation

Both the House and Senate have rolled out retirement plan legislative proposals that recycle many previous initiatives. With bipartisan approval in both chambers, hopes are high that 2019 will be the year for action. The proposals include coverage and nondiscrimination relief for closed defined benefit plans, enhancements for 401k plans, multiple employer pension plans, lifetime income disclosures for defined contribution plans, and more.

Source: Buck.com, April 2019

Senators Want to Force Businesses to Contribute to Retirement Plans

A bill being introduced by Sens. Chris Coons of Delaware and Amy Klobuchar of Minnesota would require businesses to pay at least 50 cents into an employee retirement plan for every hour worked. To pay for the proposal, the senators are proposing raising the corporate tax rate by 2 percentage points to 23%. Many companies that currently offer pensions or provide matching contributions to 401k plans would already be in compliance.

Source: Cnbc.com, April 2019

Senate Measure Addresses Retirement Crisis

A bill to increase retirement savings opportunities for U.S. workers was introduced today by bipartisan leadership of the Senate's tax-writing committee. The effort boosts chances for enacting a comprehensive retirement security measure into law this year, according to the Insured Retirement Institute.

Source: Myirionline.org, April 2019

Congress Set to Act on Major Retirement Legislation

The House Ways & Means Committee is expected to mark up proposed tax legislation on April 2. The bills to be marked up include the SECURE Act and an open multiple employer plan bill. The SECURE Act is based on previously introduced legislation known as the Retirement Enhancement and Savings Act and also includes several additional provisions from other bills that have been added to garner bipartisan support.

Source: Ascensus.com, April 2019

"SECURE Act" May Advance Soon in House, Mirroring "RESA"

A new bill introduced in the House of Representatives, dubbed the "SECURE Act," mirrors many of the provisions of the popular Retirement Enhancement and Savings Act (RESA) that failed to pass during the last Congress. According to a statement from the Insured Retirement Institute, which has advocated for RESA as well as this follow-up legislation, the new bill was negotiated by a bipartisan team of House Ways and Means Committee members.

Source: Planadviser.com, March 2019

401k Investor Tax Bill DOA Now, Could Resurface?

Democrats' proposed Wall Street Tax Act of 2019 faces long odds with Republicans controlling White House and Senate, but idea could have better chance if Democrats take control after 2020 presidential election.

Source: 401kspecialistmag.com, March 2019

Senate Tax Extenders Bill Has Disaster Provisions Impacting Retirement Plans

Senate Finance Committee Chairman Charles Grassley has introduced the Tax Extender and Disaster Relief Act of 2019 (S. 617). The primary aim of the legislation is to extend a number of expired or expiring tax provisions, but it is also being used to provide tax-related relief provisions specific to retirement savings arrangements apply to distributions taken from IRAs and tax-qualified employer-sponsored retirement plans.

Source: Ascensus.com, March 2019

Bipartisan Bill Introduced to Create ERISA Annuity Safe Harbor

Two members of the U.S. House of Representatives, one a Democrat and the other a Republican, have introduced H.R. 1439, known as the Increasing Access to a Secure Retirement Act.

Source: Planadviser.com, March 2019

Congressional Hearings a Harbinger of Pension Reform?

We witnessed several important hearings in Congress during the first week of February. The two revealed what could be a healthy, bipartisan push for retirement plan reform, and this could bode well for those trying to close the retirement savings gap.

Source: Ascensus.com, February 2019

Familiar Retirement Reforms Already in Play in New Congress

Familiar retirement legislation has been introduced in the brief period since the new Congress convened in January. Despite the U.S. House of Representatives flipping to Democratic control in November's midterm elections, retirement reform remains an issue where significant bipartisan support is evident, and clearly growing. Several significant items included in the bill and intended to address the bill's objectives are described.

Source: Ascensus.com, February 2019

House Ways and Means Committee Talks Retirement Reforms

A panel of expert witnesses from across the financial services domain discussed shortcomings and opportunities for improvement in the U.S. retirement savings system; they urged House members to embrace bipartisanship and commonsense solutions.

Source: Planadviser.com, February 2019

Retirement Savings Bill Re-Introduced in House With Bipartisan Backing

Legislation that would help small businesses offer retirement plans to their employees and ease the use of annuities in them was re-introduced in the House on Wednesday with bipartisan backing. The Retirement Enhancement and Savings Act contains several provisions designed to increase the number of workers covered by workplace programs, according to a summary of the measure.

Source: Investmentnews.com (registration may be required), February 2019

SIMPLE Plan Modernization Act Introduced in Senate

Senators Susan Collins, chair of the Aging Committee, and Mark Warner, have introduced the SIMPLE Plan Modernization Act to provide greater access to SIMPLE plans among small businesses. It aims to make SIMPLE plans more accessible among small businesses and would raise the contribution and catch-up limits.

Source: Planadviser.com, February 2019

Could the Government Take the Bite Out of RMDs?

Savers enjoyed tax benefits when they contributed and as their accounts (hopefully) grew, in retirement the government would like to collect deferred part of the tax. But people in government have been rethinking this bargain; the executive and legislative branches have been floating ideas to reduce the RMD bite recently.

Source: Morningstar.com, February 2019

How Will the Midterm Elections Affect Retirement Policy?

The November 2018 midterm elections promise nothing if not change. As the Republican's hold on the Senate strengthened, the Democratic party took a majority in the House of Representatives. The Democrat and Republican parties historically hold very different positions in several important areas. As such, the change in leadership in the House may lead to sweeping changes in every area, particularly when it comes to retirement policy.

Source: Hallbenefitslaw.com, February 2019

Bipartisan Legislation Proposed to Promote Student Loan Repayment Retirement Benefits

US Senator Ron Wyden introduced the Retirement Parity for Student Loans Act, which would allow employers to make matching contributions under 401k, 403b and SIMPLE plans with respect to student loan repayments made by employees. If enacted, this legislation would provide powerful new guidance for employers looking to offer student-loan-repayment-related benefits to their employees.

Source: Employeebenefitsblog.com, January 2019

Is the Swan Going to Live?

Throughout the past several years, Senator Orrin Hatch has led a charge to make certain modifications to the law relating to qualified retirement plans. He has again introduced a 2018 version of the Retirement Enhancement and Savings Act (RESA) for consideration by Congress. Will this last chance to get this bill passed be the Senator's wonderful swan song? Details of the bill are reviewed.

Source: Ferenczylaw.com, January 2019

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