Lance Schoening, Des Moines, Iowa-based director of policy for Principal Financial Group, estimates that a final SECURE 2.0 package will be ready sometime in the early fall. "Staff on both side of the Capitol are in the committees on this legislation … to come up with a negotiated, unified product for both chambers," Mr. Schoening said.
While each of the three bills are vastly similar, there are differences that need to be worked out, sources noted.
Arguably the most consequential difference involves automatic enrollment and automatic escalation. The House-passed bill features a provision to require new 401(k) and 403(b) plans to automatically enroll participants upon becoming eligible. Initially, participants would be enrolled at a floor of 3% of pay, and that contribution would then be increased — unless the participant opts out — by 1 percentage point each year until it reaches 10%.
Neither bill advanced out of committees in the Senate includes such a provision, but Diana McDonald, senior policy adviser at Groom Law Group in Washington, expects auto enrollment and auto escalation to make it into a final version. "That's how you increase Americans' retirement security," Ms. McDonald said.
Another major difference among the bills centers on expanding the saver's credit, which allows low- and middle-income Americans contributing to workplace retirement plans or individual retirement accounts to claim a credit against the taxes they owe. The amount of the credit depends on their income, tax filing status and how much they set aside for their retirement.
The House-passed bill would establish a 50% credit for all workers below a certain threshold based on the filers' adjusted gross income. Those above the threshold will get a slightly reduced credit that is gradually phased out.
The Senate Finance Committee's EARN Act would create a single 50% credit as well, but also make the credit refundable and turn it into a direct government matching contribution to the taxpayer's IRA or retirement plan, noted a post from Groom Law to which Ms. McDonald contributed.
With respect to 403(b) plans, the original bill advanced out of the Ways and Means Committee in 2021 included a provision to amend existing securities laws to permit the use of collective investment trusts in 403(b) plans. However, the provision was largely removed before the House passed the bill after an objection was raised by House Financial Services Committee Chairwoman Maxine Waters, D-Calif., sources said.
The Financial Services Committee had jurisdiction over the provision because it involved securities law, which led to Ms. Waters' objection, sources said. House leaders removed the provision instead of referring the bill to the Financial Services Committee for markup, sources said.
A representative for Ms. Waters did not respond to requests for comment, but retirement industry sources are confident the provision will make it into a final package, though it is not in either Senate version.