The House Ways and Means Committee on Wednesday by voice vote approved a massive retirement security package known as SECURE Act 2.0.
Ways and Means Committee Chairman Richard Neal, D-Mass., and Kevin Brady, R-Texas, the committee's ranking member, officially reintroduced the Securing a Strong Retirement Act of 2021 on Tuesday and it will now head to the full House.
The bill, a version of which was originally introduced in October during the previous congressional session, includes dozens of provisions aimed at boosting retirement security. It builds on the Setting Every Community Up for Retirement Enhancement Act, known as the SECURE Act, which Congress passed and was signed into law in late 2019.
The Securing a Strong Retirement Act includes provisions that would require 401(k), 403(b) and SIMPLE plans to automatically enroll participants upon becoming eligible, allow 403(b) plans to participate in multiple employer plans and invest in collective investment trusts, create a national online database of lost retirement accounts to reduce the number of missing participants, and make changes to qualifying longevity annuity contracts, or QLACs, by removing the 25% cap — currently retirement savers can spend up to 25% of their account on a QLAC.
The bill's auto-enrollment provision initially enrolls participants at a floor of 3% of pay, and that contribution is then increased — unless the participants opts out — by 1 percentage point each year until it reaches 10%.
The bill would also raise the age at which individuals are required to begin withdrawing a percentage of their tax-deferred retirement plan to 75 from 72 over the next decade. Moreover, the bill would permit an employer to make matching contributions under a 401(k) plan, 403(b) plan or SIMPLE IRA with respect to qualified student loan payments.
Many of the bill's provisions have been featured in previously introduced bills, sponsored by both Republicans and Democrats. "I'm happy that we were able to work together on a bipartisan basis to develop this important legislation," Mr. Neal said Wednesday. "Our efforts have resulted in an excellent product that will help Americans plan for their golden years."
Committee members on both sides of the aisle said the bill will have a positive impact on Americans saving for retirement and touted the bipartisan process in crafting the bill. "Today's markup is a testament to the progress we can make when we work in a bipartisan way to address the real needs of all Americans," Mr. Brady said.
Added Mr. Neal, "The SECURE Act was the most significant retirement legislation to become law in over a decade. Let's not wait another decade to enact important provisions in the SECURE Act 2.0. Today's bill goes a long way in addressing this country's retirement challenges and crises. I urge all of my colleagues to support this much-needed legislation."