Skip to main content
pilogo-NEW
Subscribe
  • Subscribe
  • My Account
  • login
  • NEWS
    • Alternatives
    • Consultants
    • Defined Contribution
    • Frontlines
    • Hedge Funds
    • Investing / Portfolio Strategies
    • Money Management
    • Pension Funds
    • People Moves
    • Private Equity
    • Real Estate
    • Searches & Hires News
    • Special Reports
    • Neil Sheth
      More asset owners clamoring for multistrategy private credit
      H.I.G. Capital promotes 2 to co-president
      Pantheon hires global head for private debt
      Silver Lake reorganizes leadership
    • Mercer appoints global alternatives leader for wealth business
      KPMG offloads pension advisory unit to private equity firm
      Ascensus snaps up Nyhart in latest deal
      Willis Towers Watson exec promoted to lead retirement unit
    • Drew Carrington
      New data questions conventional wisdom
      Kathleen Long
      Plans enticing 401(k) savings even without employer contribution
      Joe Caldera
      Group acting to plug a gap in retirement
      Jean Young
      Analysis on stretching the match shows it doesn't work as intended
    • MOney maze
      PLSA has tips for trustees of U.K. retirement funds
      Norm Champ
      Norm Champ shifts his focus to financial literacy in latest book
      Ray Dalio book
      Dalio releases illustrated version of ‘Principles’ book
      Youngjae Ryu
      Korea Corporate Governance Forum set to debut Dec. 12
    • Macro hedge fund Stone Milliner shutting down
      James Medeiros
      Hedge fund managers are warming up to custom funds
      Louis Bacon
      Moore Capital's Louis Bacon to quit money management business
      James Yeh
      Citadel promotes James Yeh to president and co-CIO
    • Steve Waygood
      Social issues take back seat to environmental concerns
      Joey Alcock
      GPIF's stock-lending stance moving governance forward
      Drew Carrington
      New data questions conventional wisdom
      Youngjae Ryu
      Korea Corporate Governance Forum set to debut Dec. 12
    • Investor checks on manager sexual harassment are improving, but still too low
      Apollo Global taps Bain Capital veteran to lead its Japan business
      Managers struggle to understand blockchain technology
      BlackRock's Mark Wiseman departs after failing to disclose relationship
    • CalPERS slashes equity emerging managers program
      Canadian multiemployer plan invests in cannabis company WeedMD
      South African state pension fund looks to expand unlisted assets
      Church of England Pensions Board CIO resigns
    • Mercer appoints global alternatives leader for wealth business
      Apollo Global taps Bain Capital veteran to lead its Japan business
      Realdania picks new CIO
      BlackRock's Mark Wiseman departs after failing to disclose relationship
    • Investindustrial raises €3.75 billion with seventh European buyout fund
      Sightway Capital closes first fund with $1.2 billion
      Private equity practices aired at House hearing
      Asia-focused NewQuest closes fourth dedicated secondaries fund at $1 billion
    • Schroders appoints real estate capital partners head
      CBRE acquires U.K. real estate debt investment business Laxfield Capital
      USAA to sell controlling interest in real estate unit
      Cold storage
      A hot time for those seeking the cold
    • Westfield Contributory looks to allocate to private equity, real estate funds
      Franklin Regional Retirement launches small-cap equity search
      Texas Muni assigns $50 million to private equity
      Northfield Bancorp taps Principal as record keeper for 401(k) plan
    • The best places to work in money management 2019
      Investment Consultants
      The 2019 Excellence & Innovation Awards
      Top-performing managers Q3 2019
  • Data
    • Research Center
    • Searches & Hires Database
    • Searches & Hires News
    • RFPs
    • Charts / Infographics
    • Sponsored Research
    • Trackers
    • Q3 2019 money manager M&A activity summary
      Q3 2019 legal overview report
      Q3 2019 searches and hires overview report
      P&I resources can give a leg up in winning new business
    • Westfield Contributory looks to allocate to private equity, real estate funds
      Franklin Regional Retirement launches small-cap equity search
      Texas Muni assigns $50 million to private equity
      Northfield Bancorp taps Principal as record keeper for 401(k) plan
    • Westfield Contributory looks to allocate to private equity, real estate funds
      Franklin Regional Retirement launches small-cap equity search
      Texas Muni assigns $50 million to private equity
      Northfield Bancorp taps Principal as record keeper for 401(k) plan
    • In-Kind Distribution Management Services (Private Markets) Provider Search
      Defined Contribution Consultant
      Consulting Services
      Technology Firms
    • To cheap large-caps go the spoils
      Only place to go is ... down
      Equity leads DC exodus amid rising markets
      Hedge fund performance fees down 11% in 2019
    • Institutional Investors: Shared Expectations, Divergent Paths
      Global Investor Study 2016
      Workplace Financial Wellness
    • U.S. Endowment Returns Tracker
      Pension Fund Returns Tracker
      Earnings Tracker
      Corporate Pension Contribution Tracker
  • Insights
    • Opinion
    • White Papers
    • Industry Voices
    • Other Views
    • Partner Content
    • Publisher's Update
    • Multiemployer fund legislation cartoon
      Multiemployer compromises needed
      SEC cartoon
      SEC rules need measured response
      High hopes for consistency and guidance from Scalia
      DC West poster
      Financial wellness gets spot at the table
    • Strengthen Your Core: Flexible Multi-Sector Strategies for a Low-Yield World
      WisdomTree Yield Enhanced U.S. Aggregate Bond Fund
      Automation, lower fees driving institutional interest in factor investing and smart beta strategies
      A Great Time to Be Agnostic?
    • Gerald Cooper
      Commentary: Single-asset deals – a structure benefiting GPs and LPs alike
      Gordon Latter, Timur Kaya Yontar and Frank Benham
      Commentary: Plan sponsors, do you know your credit risk?
      Timothy Boomer
      Commentary: For plan sponsors, derivatives shouldn’t be a dirty word
      Martin Vogt
      Commentary: Renewables investing makes inroads in the Caribbean, Central America
    • Commentary: Revised statement on corporate purpose misses the mark
      Commentary: Stronger partnership needed between shareholders, managers
      Commentary: The associated costs of DB terminations
      Commentary: Support the Butch Lewis Act
    • P&I Content Solutions
      What it takes to get retirement income right
      P&I Content Solutions
      EDHEC Research For Institutional Money Management - December 2019
      P&I Content Solutions
      Dynamic derisking: How an OCIO can help plan sponsors manage funding volatility
      P&I Content Solutions
      OCIO graduates from education phase
    • Everything Must Change
      Tomatoes & Investments
      Baby, it’s hot outside!
  • Multimedia
    • Videos
    • Webinars
    • Polls
    • Slideshows
    • Charts / Infographics
    • Excellence & Innovation Awards 2019: Laura Mittelstaedt
      DC West 2019
      Excellence & Innovation Awards 2019: Lisa Joe
      DC West 2019: Empower Retirement's Doug Peterson on cybersecurity
    • Finding the Positive in Negative Interest Rates
      How to Position Institutional Portfolios to Capitalize on China’s Growth
      Financial Wellness: Gaining an edge with plan sponsors
      Trends in Hedge Fund Investing
    • POLL: Creating a great workplace
      POLL: Shared values between money managers and plan sponsors
      POLL: Climate change's impact on investing
      POLL: Ultralong-term U.S. Treasury bonds
    • view gallery
      85 photos
      Best places to work in money management 2019
      view gallery
      21 photos
      The world's 20 largest retirement funds
      view gallery
      11 photos
      Top 10 DC money managers
      Top 15 managers by worldwide institutional AUM
    • Graphic: In ESG investing, global governance matters
      Tradewatch for 3Q 2019
      To cheap large-caps go the spoils
  • Events
    • Conferences
    • Webinars
    • East Coast DC Conference
      Fixed Income & Credit
      DC Investment Lineup
      ESG Investing
    • Finding the Positive in Negative Interest Rates
      How to Position Institutional Portfolios to Capitalize on China’s Growth
      Financial Wellness: Gaining an edge with plan sponsors
      Trends in Hedge Fund Investing
  • Careers
  • Research Center
MENU
Breadcrumb
  1. Home
  2. WASHINGTON
June 10, 2019 01:00 AM

Senate takes up SECURE Act, but bill still in limbo

Senators said to be holding back despite strong support in House due to absent 529 plan provision

Brian Croce
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print
    Patrick Schneider
    Christopher Spence thinks senators were swayed by the overwhelming House vote.

    All eyes have turned to the Senate to pass a retirement security package after the House approved a bill on May 23 in a 417-3 vote.

    The Senate had a bill similar in scope to the House's Setting Every Community up for Retirement Enhancement Act of 2019, referred to as the SECURE Act. Many in the retirement community thought the Senate would try to pass its own bill, the Retirement Enhancement Savings Act, and bridge any gaps between the two bills in conference.

    But shortly after the House vote, Senate leaders decided to forgo passing RESA and "hotlined" the SECURE Act in an attempt to move it via unanimous consent.

    "It was a bit of a surprise that they decided to take up the SECURE Act, mostly that they decided to take it up so quickly," said Christopher Spence, senior director of federal government relations for TIAA-CREF in Washington. Likely, he added, Senate leaders saw the landslide vote in favor of the SECURE Act and decided it made sense to move on it directly.

    If no senator were to object to the unanimous consent offering, the bill would simply pass as is. However, sources said Sen. Ted Cruz, R-Texas, and likely others, placed a hold on the bill, objecting to the removal in the House version of provisions that would have allowed funds in 529 college savings plans to be used for home schooling costs and supplies for K-12 students, among other objections.

    As of now, the bill remains in limbo as Senate leaders try to quell the objections. Since holds can be placed anonymously, sources said it's difficult to tell how many senators are blocking the bill and what their concerns are.

    Mr. Cruz's office did not respond to a request for comment.

    While supporters of the SECURE Act are still confident it will pass, concerns are growing with each passing day.

    "My hope is they do this sooner rather than later because as we've seen in the past, the provisions in the SECURE Act are not new; they've been around for the past couple of years" in previously introduced bills, said Srinivas D. Reddy, senior vice president of retirement and income solutions at Principal Financial Group in Des Moines, Iowa, and chairman of the ERISA Advisory Council. "The longer it takes ... the more the likelihood it doesn't pass."

    Mr. Spence said the retirement community would prefer the Senate pass the bill via unanimous consent as soon as possible.

    "The longer it hangs out there, the more uncertain and nervous it's going to make everyone,” he said.

    If the unanimous consent route doesn't work, the Senate may attach the bill to a piece of must-pass legislation, like a spending bill, in the fall, said Kent Mason, a partner with law firm Davis & Harman LLP in Washington. However, he noted that going through “regular order” to pass the bill would take much longer, which is why Senate leadership is trying to pass it via unanimous consent.

    'Something to think about'

    The SECURE Act features wide-ranging provisions, including ones that make it easier for smaller employers to join open multiple employer plans, ease non-discrimination rules for frozen defined benefit plans and add a safe harbor for selecting lifetime income providers in defined contribution plans. It also increases the automatic-enrollment safe harbor cap to 15% from 10%.

    House lawmakers added a provision to the bill repealing a portion of the Tax Cuts and Jobs Act of 2017 that raised taxes on federal benefits received by Gold Star families — those who lost a family member in military service. The SECURE Act, in part, rectifies that issue by taxing the benefits as earned income rather than unearned income subjected to higher estate taxes.

    Melissa Kahn, managing director of retirement policy for State Street Global Advisors' defined contribution team, said the Gold Star provision could give “these senators something to think about” when objecting to the bill as a whole.

    Some in the retirement community also take issue with portions of the bill, though still support its passage. Of note, plan sponsor groups have criticized the bill's Lifetime Income Disclosure Act provision, saying it creates needless confusion, additional costs and stifles innovation in the way plan sponsors communicate with plan participants on the importance of saving for the long term. LIDA requires quarterly benefit statements furnished to plan participants to include, at least once a year, a statement of the lifetime income stream the accrued assets would provide.

    “While we are disappointed that the LIDA provisions does not include more flexibility for plan sponsors, we continue to have discussions and look for opportunities to expand these provisions to allow for more tailored estimates that are more useful to participants and that plan sponsors are currently providing,” said Aliya Robinson, senior vice president of retirement and compensation policy at the ERISA Industry Committee in Washington.

    More work to be done

    And while the SECURE ACT still hasn't crossed the finish line, some believe there is enough momentum to do more on retirement security this Congress. Phil Waldeck, Hartford, Conn.-based president of Prudential Retirement, said the bill before the Senate would vastly improve the retirement landscape by giving greater access to workplace retirement plans. “This is legislation that we're really optimistic on, and I think is a great step forward that we'll be able to build on,” Mr. Waldeck added.

    If the SECURE Act and RESA are considered round one of retirement security reform, round two would likely center around the Retirement Security and Savings Act of 2019. That bill, reintroduced in the Senate last month by Rob Portman, R-Ohio, and Ben Cardin, D-Md., features more than 50 provisions aimed at improving coverage for small employers and among part-time workers. The bill would also reduce barriers to in-plan lifetime income options and allow employees to keep retirement savings in qualified plans until the age of 72, and eventually 75, before having to withdraw a minimum amount, beyond the current age limit of 70½.

    U.S. Rep. Richard Neal, D-Mass., chairman of the Ways and Means Committee, introduced a bill in the last Congress — the Retirement Plan Simplification and Enhancement Act of 2017 — that includes provisions to establish a new safe harbor to get employers to defer more than the automatic deferral floor of 3% of salary in the first year and exempt retirement savings below $250,000 from complicated required minimum distribution rules.

    Mr. Neal has yet to reintroduce the bill this Congress but has expressed his desire to do more on retirement security.

    “We can make a lot of progress on round two in 2019,” Mr. Mason said

    Related Articles
    Bill calling for retirement commission to guide Congress reintroduced
    House overwhelmingly passes bipartisan retirement bill
    Senate working to pass SECURE Act quickly
    Recommended for You
    sponsored content
    Events
     
     
    Advertisement
    White Papers
    A Great Time to Be Agnostic?
    Shedding the Home-Country Bias
    Automation, lower fees driving institutional interest in factor investing and s…
    WisdomTree Yield Enhanced U.S. Aggregate Bond Fund
    Strengthen Your Core: Flexible Multi-Sector Strategies for a Low-Yield World
    View More
    Sponsored Content
    Partner Content
    How Big Data Delivers Solutions to ESG Investors
    How a Multisector Credit Approach Can Lower Risk, Increase Diversification
    ESG Investing Supplement
    Know Your DB Plan’s ‘Persona’ to Help Make the Right Strategy Choices
    Leveling the playing field for public employee retirement security
    View More
    E-MAIL NEWSLETTERS

    Sign up and get the best of News delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    Subscribe Today

    Get access to the news, research and analysis of events affecting the retirement and institutional money management businesses from a worldwide network of reporters and editors.

    Subscribe
    Connect With Us
    • RSS
    • Twitter
    • Facebook
    • LinkedIn

    Our Mission

    To consistently deliver news, research and analysis to the executives who manage the flow of funds in the institutional investment market.

    pilogo-NEW
    About Us

    Main Office
    685 Third Avenue
    Tenth Floor
    New York, NY 10017-4036

    Chicago Office
    150 N. Michigan Ave.
    Chicago, IL 60601

    Contact Us

    About Pensions & Investments

     

    Advertising
    • Media Kit
    • P&I Content Solutions
    • P&I Careers | Post a Job
    • Reprints & Permissions
    Resources
    • Subscribe
    • Newsletters
    • FAQ
    • P&I Research Center
    • Site map
    • Staff Directory
    Legal
    • Privacy Policy
    • Terms and Conditions
    Pensions & Investments
    Copyright © 1996-2019. Crain Communications, Inc. All Rights Reserved.
    • NEWS
      • Alternatives
      • Consultants
      • Defined Contribution
      • Frontlines
      • Hedge Funds
      • Investing / Portfolio Strategies
      • Money Management
      • Pension Funds
      • People Moves
      • Private Equity
      • Real Estate
      • Searches & Hires News
      • Special Reports
    • Data
      • Research Center
      • Searches & Hires Database
      • Searches & Hires News
      • RFPs
      • Charts / Infographics
      • Sponsored Research
      • Trackers
    • Insights
      • Opinion
      • White Papers
      • Industry Voices
      • Other Views
      • Partner Content
      • Publisher's Update
    • Multimedia
      • Videos
      • Webinars
      • Polls
      • Slideshows
      • Charts / Infographics
    • Events
      • Conferences
      • Webinars
    • Careers
    • Research Center