The House on Tuesday overwhelmingly passed a bipartisan retirement security bill in a 414-5 vote.
The Securing a Strong Retirement Act of 2022, introduced by Ways and Means Committee Chairman Richard Neal, D-Mass., and ranking member Kevin Brady, R-Texas, 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 of 2022, which House lawmakers are calling SECURE 2.0, is made up of two retirement security packages introduced last year — a bill with the same name introduced by Mr. Neal and Mr. Brady that was approved out of the Ways and Means Committee via a voice vote in May, and the Retirement Improvement and Savings Enhancement Act, or RISE Act, which was passed out of the House Committee on Education and Labor via a voice vote in November. Education and Labor Committee leaders — Chairman Robert C. "Bobby" Scott, D-Va.; ranking member Virginia Foxx, R-N.C.; Health, Employment, Labor and Pensions Subcommittee Chairman Mark DeSaulnier, D-Calif.; and subcommittee ranking member Rick W. Allen, R-Ga. — introduced the RISE Act in November.
The bill passed Tuesday includes provisions that would require 401(k) and 403(b) 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 qualified 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 participant 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 to a 401(k) plan, 403(b) plan or SIMPLE IRA on qualified student loan payments.
Much like the SECURE Act's passage in 2019, the retirement community welcomed Tuesday's House vote.
"The bill provides common-sense, bipartisan solutions which address the obstacles that continue to inhibit saving for and producing income during retirement," said Wayne Chopus, president and CEO of the Insured Retirement Institute, in a statement.
If enacted, the bill will "help more Americans attain a secure financial future and increase their confidence in achieving overall financial well-being," said Thasunda Brown Duckett, president and CEO of TIAA-CREF, in a statement. "I am hopeful that with Congress' continued leadership, we will leverage the momentum of the SECURE Act to achieve additional bipartisan reforms."
The bill will now head to the Senate where a bipartisan group of lawmakers has introduced or is working on similar retirement security packages.
Of note, Sens. Rob Portman, R-Ohio, and Ben Cardin, D-Md., in May reintroduced the Retirement Security and Savings Act, which features more than 50 provisions aimed at getting people to save more for retirement.
And on Tuesday, Sen. Patty Murray, D-Wash., chairwoman of the Senate Health, Education, Labor, and Pensions Committee, and Sen. Richard Burr, R-N.C., the committee's ranking member, said they're working on retirement security legislation that they are aiming to unveil this spring.
The Senate could take up the House bill or pass its own. If the latter path is taken, any differences in the two bills would need to be reconciled before final passage.