Congress sent a letter to the Treasury Department informing Secretary Janet Yellen and Internal Revenue Service Commissioner Daniel Werfel that it will introduce legislation to fix several technical errors contained in SECURE 2.0. Signed by four prominent SECURE 2.0 figures, according to the letter, the fixes will better reflect congressional intent.
The bill, titled "The Retirement Fairness for Charities and Educational Institutions Act of 2023" and backed by House Financial Services Committee Member Rep. Frank D. Lucas would amend federal securities laws to enhance 403b annuity plans in part by adding a CIT option.
Three months after the passage of the SECURE 2.0 Act of 2022, some observers are looking at the law and considering what SECURE 2.0 left out. Some items have been widely covered, such as the failure to include a provision permitting collective investment trusts in 403b plans. Some technical errors, such as accidentally banning catch-up contributions starting in 2024 have also been widely noted. But observers say some other major omissions from SECURE 2.0 have flown under the radar.
A provision in President Biden's new legislation aims to keep workers from cashing out their 401k when they move from one job to another, building on a similar effort launched last year by the private sector.
The SECURE 2.0 Act of 2022 was signed into law in the waning days of 2022. But some things need fixing and some things you may have overlooked. Nevin Adams and Fred Reish highlight five key areas calling for attention.
This new SECURE 2.0 contains many new provisions, including changes, again, to RMDS, but also includes changes that had long been discussed but never occurred. One such change is the requirement that 401k and 403b plans feature automatic enrollment for employees of companies that sponsor such plans. While this new requirement may scare plan sponsors, there are quite a few exceptions that effectively make the automatic enrollment feature only apply to new plans of larger entities.
The chart here briefly summarizes elements of SECURE 2.0 that are most likely to impact employers' tax-qualified plans and provides some observations about the changes for those affected by the new law to consider.
The SECURE 2.0 has the potential to affect workplace retirement savings in a big way. This article addresses how the new law can increase workplace retirement plan participation and savings rates. Plan sponsors and administrators should take note to keep up with this evolving area.
The SECURE 2.0 Act of 2022 was enacted as part of the 2023 Consolidated Appropriations Act, which was signed into law on December 29, 2022. It is the culmination of a multi-year, bicameral, bipartisan effort to follow up on the SECURE Act that was enacted on December 20, 2019. SECURE 2.0 contains roughly 90 separate provisions each with its own effective date. This article focuses on the provisions of SECURE 2.0 that are of interest to large and medium-sized employers and plans.
This article summarizes the key provisions of interest to plan sponsors, including which changes are required, which are optional (and will require decisions by sponsors as to whether to adopt or not), and the respective effective dates.
Federal lawmakers recently passed the SECURE 2.0 Act of 2022, a retirement security package that will introduce some of the most comprehensive changes to retirement policy in recent years. Tucked in the omnibus appropriations package, SECURE 2.0 will expand access to and provide incentives for employer-sponsored retirement plans. This article covers some of the key provisions in SECURE 2.0.
As part of its mammoth 2022 year-end spending bill, Congress passed Secure 2.0, which makes dozens of modifications to the laws governing retirement savings. These revisions, almost all of which were driven by concerns that Americans are failing to accumulate sufficient resources to fund their retirement, build on changes Congress made in 2019 in the SECURE Act. This is a list of key provisions in Secure 2.0 that employers with existing 401k and 403b plans need to pay attention to.
While plan amendments generally need not be made until the end of the first plan year beginning on or after January 1, 2025, plans must be operated under the effective date of each new provision. Here are highlights of key provisions, organized by the same headings used in the Act.
As part of the omnibus spending bill passed in a frenzy before the holiday break, Congress included the SECURE 2.0 Act. This new law contains several changes that will have a profound impact on the rules governing retirement plans. This article summarizes the top five provisions affecting plan sponsors and participants.
The Act makes numerous changes affecting retirement plans. This article provides an overview of the changes that we believe are of most interest to larger plan sponsors. Any plan amendments needed as a result of these changes must be adopted by the last day of the 2025 plan year unless extended by the DOL or the IRS.
The SECURE 2.0 Act passed Congress and would allow employers to offer matching 401k, 403b, 457b, and SIMPLE IRA contributions if the participant elects to pay down student loans instead of contributing to a retirement plan. This option would be available starting after December 31, 2023. How should plan sponsors go about implementing this provision, if they choose to?
SECURE 2.0 contains significant changes to employer-provided retirement plans and individual retirement plans, referred to in the CAA as the SECURE 2.0 Act of 2022. These provisions largely build upon the changes made under the SECURE Act, which was signed into law on Jan. 1, 2020. This article addresses some of the key provisions under SECURE 2.0 that will impact employer-provided retirement plans.
The wait is over for SECURE 2.0, a long-awaited (and debated) package of retirement plan reforms. Given the breadth of the changes and the anticipated regulatory efforts to implement the new law, virtually all qualified retirement plans will need to be reviewed in conjunction with SECURE 2.0's passage. This is a high-level summary of some key highlights for employers and retirement plan sponsors.
SECURE 2.0 implements comprehensive pension reform and includes many changes that have been on the benefits community's wish lists for some time. Here is a summary of some of the major changes grouped under the goals of the legislation. Provisions reflect several themes.
Congress made several changes to retirement plans as part of the Consolidated Appropriations Act of 2023, which recently passed both the House and Senate. The final bill contains several provisions affecting retirement plans under Division T of the bill titled "Secure 2.0 Act of 2022." SECURE 2.0 builds on the Setting Every Community Up for Retirement Act, which was passed in 2019. Here is a high-level summary of some of the key provisions that affect plan sponsors of retirement plans.
The enactment of SECURE 2.0 caps several years of congressional effort. Numerous stakeholders have worked to educate lawmakers about the value of the employer-based retirement system and the need for many policy changes to support it. This article provides a high-level summary of some key provisions in the legislation.
Congress earlier this month introduced the Retirement Savings for Americans Act of 2022, which advances the idea of a national 401k plan. What's more, the bill carries both bipartisan and bicameral support, as it is backed in the Senate by Democrat John Hickenlooper and Republican Thom Tillis, and in the House by Democrat Terri Sewell and Republican Lloyd Smucker.
As expected, the SECURE 2.0 Act of 2022, an extensive piece of legislation aimed at retirement plan reform, is included in the Consolidated Appropriations Act of 2023. SECURE 2.0 includes over 100 provisions intended to expand coverage, increase retirement savings, and simplify and clarify retirement plan rules.
The widely anticipated legislation known as SECURE 2.0 was attached to the omnibus spending package released by the Senate Appropriations Committee on Tuesday. The bill does not contain any huge surprises for those following its three component bills through Congress, and its most popular provisions survived intact into the final bill.
Passage of the retirement reform legislative package known as SECURE 2.0 hinges primarily, if not entirely, on whether Congress can pass a budget by January 3, which is not a foregone conclusion. January 3 is when the next Congress is sworn in, and any unfinished bills under consideration must be proposed again.
This legislation aims to fill the existing gaps in the current retirement system for workers. First, while many workers are saving, they realistically will outlive their savings without lifetime income, which leads to the so-called "guarantee gap." Second, workers are not saving enough to last multiple decades into retirement, which results in the "savings gap." Finally, the "access gap" arises from insufficient workers having access to employer-sponsored plans.
Senator Ben Cardin, D-Maryland, expressed concern that the SECURE 2.0 retirement reform legislation might not pass this year while speaking at the Employee Benefit Research Institute Retirement Summit on Thursday. The legislative package may be running out of time, suggested Senator Cardin. Cardin participated in an online discussion with retiring Senator Rob Portman hosted by Eric Stevenson, president of Nationwide Retirement Plans.
Senator Pat Toomey wrote a follow-up letter to twelve ESG ratings and analytics providers on October 31 requesting that they keep documents related to the methodologies for their environmental, social and governance ratings. Six of the twelve provided responses. The other six either have not responded or provided responses that the Toomey considered "incomplete". Senator Cotton sent a more threatening letter to 51 law firms that counsel investors and other actors in the ESG sector.
A new bill that would allow for automatic 401k rollovers has received support from the U.S. House of Representatives, officially securing bicameral legislative backing. The Advancing Auto-Portability Act of 2022 (H.R. 9252) was introduced on October 28 and is aimed at reducing leakage in defined contribution retirement plans.
Shortly before recessing for the mid-term elections, the House of Representatives approved legislation that would prohibit arbitration and discretionary clauses in employer-sponsored benefit plans under ERISA. The proposed changes were passed as part of the Mental Health Matters Act (H.R. 7780), which the House approved on Sept. 29.
On Thursday, Senators Pat Toomey, Tim Scott, and Rep. Peter Meijer introduced the Retirement Savings Modernization Act. The act purports to "bolster Americans' retirement savings by allowing workers in defined contribution plans, like 401ks, to better diversify their portfolios and invest in higher returning asset classes."
We now have legislative language for the Enhancing American Retirement Now (EARN) Act and a quick review finds a change from the concept draft regarding catch-up contributions. With legislative language now in hand, it appears the Finance Committee leaders have placed an income floor to the revenue-raising provision concerning catch-up contributions being treated as Roth contributions.
On June 21, 2022, the DOL published its Spring 2022 Regulatory Agenda which lists all the regulations the DOL expects to have under active consideration, including 401k reform items. You should check them out to understand the DOL's 401k-related priorities for the next 12 months. Here are the three 401k-related priorities that the author is most excited about.
The Biden administration plans to introduce various rules before the end of 2022 that will impact ERISA-regulated benefits plans. Meanwhile, Congress is working to smooth out differences between the Senate and House on a broad retirement policy omnibus bill. Here is a review.
Representatives David Schwikert and Byron Donalds have introduced H.R. 8579, the Retirement Protection Act. The bill proposes modification of the saver's credit by replacing the three-tier formula with a single 50 percent credit percentage on contributions up to $2,000, with phase outs beginning at certain AGI thresholds.
The Maximize Americans' Retirement Security Act (S. 4613), legislation introduced July 26 by Sen. Mike Braun, would clarify that the fiduciary duty of plan administrators is to select and maintain investments based solely on "pecuniary" financial factors. Joining Braun as cosponsors are Sens. Richard Burr, Tommy Tuberville, Cynthia Lummis, Roger Marshall, Roger Wicker, Steve Daines, and James Inhofe.
Staff on both sides of the Capitol are now working to negotiate a unified, bicameral version of retirement legislation that could potentially be included in a must-pass spending bill later this year. This chart compares the House and Senate bills and identifies differences among the bills.
SECURE 2.0, shorthand for three bills that would have significant implications for retirement plans, continues to work its slow but steady path through Congress. It now appears that SECURE 2.0 will be enacted late this year. Plan sponsors should be aware of the many changes included in this pending legislation. This article addresses the most significant provisions that would affect midsize and large DC plans.
The DOL has proposed an amendment to an almost 40-year-old prohibited transaction exemption that allows major financial firms to manage retirement assets. The changes relate to misconduct and convictions involving financial institutions and money managers, as well as their employees and subsidiaries. The proposed amendment, known as the Qualified Professional Asset Manager (QPAM) Exemption, will "ensure the exemption continues to protect plans, participants and beneficiaries, individual retirement account owners and their interests," according to the department.
A key House Republican has released a discussion draft of financial data privacy legislation that could impact how retirement plan providers and administrators collect and share consumers' personal information. If enacted, it could have any number of implications for the retirement industry, including in relation to the sharing of data with third parties, administering financial wellness programs, or being sued for unauthorized access or sharing of information to name a few.
The DOL's cybersecurity investigation into Alight Solutions, a retirement plan recordkeeper, has queued up court rulings on the reach of the DOL's subpoena power that may have important implications for ERISA plan sponsors and their respective recordkeepers and service providers moving forward.
On March 29, 2022, the House of Representatives passed the Securing a Strong Retirement Act of 2022. SECURE 2.0 is a comprehensive bill designed to increase access to retirement savings and includes a variety of provisions that would affect employer-provided retirement plans. On June 14, 2022, the Senate Health, Education, Labor, and Pensions Committee unanimously approved its version of SECURE 2.0, the Retirement Improvement and Savings Enhancement to Supplement Health Investments for the Nest Egg Act.
Bipartisan legislation that would make it easier for small businesses to offer retirement plans and that has the backing of the American Retirement Association has been introduced in the House of Representatives. Reps. Linda Sanchez and Darin LaHood -- both of whom are members of the tax-writing House Ways & Means Committee -- introduced the Starter-K Act on June 16.
U.S. Treasury Secretary Janet Yellen has weighed in on the notion of including cryptocurrency in retirement plans. Bloomberg Law reports that, in response to a question about Fidelity's April 26 announcement that it would provide a crypto option on its retirement plan platform, Yellen responded: "It's not something that I would recommend to most people who are saving for their retirement. To me it's a very risky investment."
Legislation that builds off the House-passed SECURE Act 2.0 bill and includes provisions advanced by the American Retirement Association has taken an important step in the Senate. The Senate Health, Education, Labor and Pensions (HELP) Committee approved the legislation by a unanimous voice vote on June 14.
SECURE 2.0 would reclassify all catch-up contributions as Roth-only in 2024, increase catch-up contributions to $10,000 only for ages 62 to 64, optionally treat employer matching contributions as Roth contributions, and offer a new safe harbor correction for auto-enrollment plans' unintentional administrative flaws.
The Senate Health, Education, Labor, and Pensions (HELP) Committee is set to move forward on legislation intended to build off the House-passed SECURE Act 2.0. After formally introducing the "Retirement Improvement and Savings Enhancement to Supplement Healthy Investments for the Nest Egg" (RISE & SHINE) Act on June 7, the committee announced that it will hold a markup on Tuesday, June 14 to consider the legislation.
Due to the lack of Supreme Court guidance on these issues, it is still not clear the extent to which particular arbitration provisions may apply to ERISA fiduciary breach claims. However, several Circuit Courts of Appeal have now weighed in and a bill called the Employee and Retiree Access to Justice Act has been introduced in the House and Senate (H.R. 7740 and S. 4219) with the express purpose of making predispute and nonconsensual post-dispute arbitration clauses unenforceable. What is a plan sponsor favoring arbitration to do?
The flurry of retirement and savings-related legislation continued Thursday with the release of a draft bill designed to "strengthen people's emergency savings and retirement security." Senate Health, Education, Labor, and Pensions Committee Chair Senator Patty Murray and Ranking Member Senator Richard Burr released the draft of the Retirement Improvement and Savings Enhancement to Supplement Healthy Investments for the Nest Egg (RISE & SHINE) Act.
Plan sponsors could be making more trips to court for retirement plan fiduciary breach claims instead of settling through arbitration, under a proposed bill. Representative Mark DeSaulnier and Senator Tina Smith have introduced the Employee and Retiree Access to Justice Act, which seeks to prohibit arbitration of claims challenging the administration and fiduciary management of benefit plans regulated under the ERISA.
In this article, Groom Principal David Kaleda explains the significance and contents of the "Supplemental Statement on Private Equity in Defined Contribution Plan Designated Investment Alternatives" issued by the DOL in December, including the Department's position concerning such investment alternatives, and its emphasis on several important fiduciary principles discussed in the Information Letter.
On May 12, 2022, the "Employee and Retiree Access to Justice Act" was introduced in the House of Representatives by Mark DeSaulnier. Senator Tina Smith introduced a companion bill in the Senate. The bill seeks to ban arbitration and discretionary clauses in employer-sponsored benefit plans governed by the ERISA. The bill seek to prohibit benefit plans from requiring arbitration of claims challenging the administration and fiduciary management of the plan, thereby forcing plan disputes into the judicial system.
The US Senate has retirement on the brain, and it's not because the average age of the legislative body is 64. A group of new bills that could change the way Americans save for retirement have landed on lawmakers' desks this spring. The proposals have broad, bipartisan support and a clear path forward, say experts. If Senators can reconcile their ideas into a concise package, President Biden could sign the changes into law before Congress' August recess. Here's a look at the changes under consideration.
The DOL's March warning about cryptocurrency, along with Fidelity's decision to move forward with a new "digital assets" capability for 401k plans, has set off a firestorm in Washington. One of the latest developments comes from Sen. Tommy Tuberville who has introduced legislation to address what he describes as preserving the ability of retirement savers to invest their 401k funds as they see fit, including investments in cryptocurrency. In the meantime, Sens. Elizabeth Warren and Tina Smith sent a letter to Fidelity CEO Abigail Johnson in response to the firm's decision to allow Bitcoin investments for 401k plans, given the DOL's warning about allowing crypto investments in 401k plans.
As You Sow, a group that describes itself as the nation's non-profit leader in shareholder advocacy, recently received backing from the SEC in its bid to include a proposal for a shareholder vote that, if approved, would require Amazon (and Comcast, according to the Philadelphia Inquirer) to "at reasonable expense and excluding proprietary information, prepare a report reviewing the Company's retirement plan options with the board's assessment of how the Company's current retirement plan options align with its climate action goals." As You Sow, a group that describes itself as the nation's non-profit leader in shareholder advocacy, recently received backing from the SEC in its bid to include a proposal for a shareholder vote that, if approved, would require Amazon (and Comcast, according to the Philadelphia Inquirer) to "at reasonable expense and excluding proprietary information, prepare a report reviewing the Company's retirement plan options with the board's assessment of how the Company's current retirement plan options align with its climate action goals." As You Sow, a group that describes itself as the nation's non-profit leader in shareholder advocacy, recently received backing from the SEC in its bid to include a proposal for a shareholder vote that, if approved, would require Amazon (and Comcast, according to the Philadelphia Inquirer) to "at reasonable expense and excluding proprietary information, prepare a report reviewing the Company's retirement plan options with the board's assessment of how the Company's current retirement plan options align with its climate action goals."
The SECURE Act was signed into law on December 20, 2019, and as you may have known, or as you will soon see, this was significant retirement plan legislation and provides the main portion of our play. The SECURE Act includes provisions that help employers and provisions that help participants. The Act is broken out into four titles, which we'll cover in two articles. The first title covers provisions that will expand and preserve retirement savings.
On March 29, 2022, the U.S. House of Representatives overwhelmingly passed the Securing a Strong Retirement Act of 2022 (HR 2954), which would significantly change retirement plans to further promote retirement savings. The bill is now with the U.S. Senate, where modifications are expected.
On March 29, the House overwhelmingly passed H.R. 2954, the Securing a Strong Retirement Act of 2021, by a vote of 414-5. The SSRA contains provisions from the version of the bill approved by the House Ways and Means Committee in May 2021 and from the Education and Labor Committee's RISE Act (H.R. 5891) approved in November 2021. This article contains Groom's summary of the legislation as passed by the chamber.
The world has gone through many sudden and unpredictable changes in the last few years. The retirement plan industry has seen many changes, as well, which has had impactful legislation and guidance that changed the retirement landscape in many positive ways. With all these changes, it seems the world and retirement plan industry is part of a storied Shakespearian plan in which we are waiting to find out if it's a comedy or tragedy. Each bit of legislation and regulatory guidance seems to be an act of our play. The legislation and guidance have come at a quick pace, but this story starts in 2018, which is five years behind us already.
The Increasing Small Business Retirement Choices Act, introduced April 26 by Sens. Jacky Rosen and Tim Scott, would amend existing law to allow small business employers to use retirement plan funds to pay expenses associated with retirement plan design changes, lowering the cost of providing better plans to workers. Currently, employers that offer 401k retirement plans and want to consider a plan design change, such as auto-enrollment or auto-escalation, must pay upfront out-of-pocket administrative costs.
One week after the House passed SECURE 2.0, the House Education and Labor Committee advanced The Protecting America's Retirement Security Act (H.R. 7310) on Tuesday. It purports to strengthen the retirement system to protect workers' retirement savings and better support families and employers.
The wide-ranging bill contains provisions aimed at expanding plan coverage, boosting savings, increasing lifetime income options, and streamlining plan administration. Several revenue-raising proposals would direct more workplace savings into after-tax Roth accounts. In addition, the DOL would have to review its fiduciary guidance for defined benefit pension risk transfers. This article highlights key SECURE 2.0 provisions of interest to employers.
On March 29, 2022, the House of Representatives passed the Securing a Strong Retirement Act of 2022 ("SECURE 2.0", HR 2954). The vote was largely supported by both parties (414-5). The Senate will likely act on the bill later this spring. While it is expected that changes will be made in the Senate version, it is widely anticipated that the legislation will ultimately become law in some form. This article highlights a few provisions of the bill that may be of interest to employers.
On March 29, 2022, the House of Representatives, by a nearly unanimous (414-5) vote, approved the Securing a Strong Retirement Act of 2022 (SECURE 2.0). The Senate is currently working on its version of comprehensive bipartisan retirement policy reform. Some believe there is a possibility that some combination of SECURE 2.0 and whatever the Senate produces could pass in a post-election lame-duck session. This article reviews the bill, focusing on some key provisions.
Figuring that defined-contribution plans such as 401ks weren't nearly secure as they should be after the passage of the SECURE Act of 2019, Congress is taking another stab at it with the Securing a Strong Retirement Act of 2021 (H.R. 2954) or SECURE 2.0. The House passed the bill yesterday under something called suspension of the rules, which is usually reserved for uncontroversial legislation. The bill now heads to the Senate, where it will probably be amended.
Representative Lucy McBath and five other Democratic co-sponsors have introduced the Protecting America's Retirement Security Act in the House of Representatives. The bill proposes fee disclosure improvements, increasing spousal protections, and automatic re-enrollment for defined contributions plans.
The House of Representatives passed SECURE 2.0. The bill passed by a nearly unanimous margin of 414 to 5. It doesn't get much more bipartisan than that. Now, the Senate must pass it before it can go to the President for signature. Even though that may sound like a fast track, it might be a little early to count those chickens.