Skip to main content
MENU
Subscribe
  • Subscribe
  • Account
  • LOGIN
  • Topics
    • Alternatives
    • Consultants
    • Coronavirus
    • Courts
    • Defined Contribution
    • ESG
    • ETFs
    • Hedge Funds
    • Industry Voices
    • Investing
    • Money Management
    • Opinion
    • Partner Content
    • Pension Funds
    • Private Equity
    • Real Estate
    • Russia-Ukraine War
    • SECURE Act 2.0
    • Special Reports
    • White Papers
  • Rankings & Awards
    • 1,000 Largest Retirement Plans
    • Top-Performing Managers
    • Largest Money Managers
    • DC Money Managers
    • DC Record Keepers
    • Largest Hedge Fund Managers
    • World's Largest Retirement Funds
    • Best Places to Work in Money Management
    • Excellence & Innovation Awards
    • WPS Innovation Awards
    • Eddy Awards
  • ETFs
    • Latest ETF News
    • Fund Screener
    • Education Center
    • Equities
    • Fixed Income
    • Commodities
    • Actively Managed
    • Alternatives
    • ESG Rated
  • ESG
    • Latest ESG News
    • The Institutional Investor’s Guide to ESG Investing
    • ESG Sustainability - Gaining Momentum
    • Climate Change: The Inescapable Opportunity
    • Impact Investing
    • 2022 ESG Investing Conference
    • ESG Rated ETFs
  • Defined Contribution
    • Latest DC News
    • DC Money Manager Rankings
    • DC Record Keeper Rankings
    • Innovations in DC
    • Trends in DC: Focus on Retirement Income
    • 2022 Defined Contribution East Conference
    • 2022 DC Investment Lineup Conference
  • Searches & Hires
    • Latest Searches & Hires News
    • Searches & Hires Database
    • RFPs
  • Performance Data
    • P&I Research Center
    • Earnings Tracker
    • Endowment Returns Tracker
    • Corporate Pension Contribution Tracker
    • Pension Fund Returns Tracker
    • Pension Risk Transfer Database
    • Future of Investments Research Series
    • Charts & Infographics
    • Polls
  • Careers
  • Events
    • View All Conferences
    • View All Webinars
    • 2022 Retirement Income Conference
    • 2022 Managing Pension Risk & Liabilities
    • 2022 WorldPensionSummit
Breadcrumb
  1. Home
  2. Legislation
May 17, 2021 12:00 AM

SECURE 2.0 getting good reviews but fate uncertain

Some want changes to House bill, plus Senate could stymie any action

Brian Croce
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print
    Richard Neal and Kevin Brady
    Bill Clark/Congressional Quarter
    House Ways and Means Committee Chairman Richard Neal, left, and Ranking Member Kevin Brady reintroduced Secure Act 2.0 earlier this month.

    Optimism is high in the retirement industry for Congress to pass another major retirement security package this session, but the path forward is uncertain and there's no such thing as a sure thing in Washington.

    Nonetheless, for proponents of retirement security legislation, the month of May is off to a promising start.

    The leaders of the House Ways and Means Committee — Chairman Richard Neal, D-Mass., and Ranking Member Kevin Brady, R-Texas — reintroduced the Securing a Strong Retirement Act of 2021 on May 4 and held a markup May 5 during which members on both sides of the aisle commended the bill and approved it unanimously via voice vote. It now heads to the full House, though a vote has yet to be scheduled.

    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 En-hancement Act, known as the SECURE Act, which Congress passed and was signed into law in late 2019.

    The Securing a Strong Retirement Act, also being referred to as SECURE Act 2.0, 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 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 — a Savings Incentive Match Plan for Employees used by small employers — on qualified student loan payments.

    "The SECURE Act was the most significant retirement legislation to become law in over a decade," Mr. Neal said during the May 5 markup. "Let's not wait another decade to enact important provisions in the SECURE Act 2.0."

    Bloomberg
    Requested changes

    Many of the bill's provisions have been featured in previously introduced bills, sponsored by both Republicans and Democrats.

    And although the bill is widely supported in the retirement industry, there are a few changes some stakeholders would like to see made before the House votes on it.

    For instance, the first version of the bill introduced in October raised the QLAC limit to $200,000 from $135,000, but the current version does not. "We are going to be working with both the House sponsors as well as the Senate to ensure that in the final bill it's (reinstated)," said Melissa Kahn, Washington-based managing director of retirement policy for State Street Global Advisors' defined contribution team.

    The bill would also require ERISA-governed defined contribution plan sponsors to provide a paper benefit statement at least once a year to participants. Last year, the Department of Labor finalized a rule that permits default electronic delivery of retirement plan disclosures, which the retirement industry hailed as a major resource and time saver.

    Aliya Robinson, senior vice president of retirement and compensation policy at the ERISA Industry Committee in Washington, said during a call with reporters that the bill's paper statement provision is a step back and lengthy annual paper statements are not as helpful for participants.

    Related Article
    House committee approves SECURE Act 2.0
    What will the Senate do?

    Industry stakeholders expect a wide show of support for the bill in the House.

    "They've found areas of common ground," Michael P. Kreps, Washington-based principal and co-chairman of the retirement services practice at Groom Law Group, said of House lawmakers. "Nothing in there is going to be a massive disruptor or game changer either positively or negatively, but there are incremental reforms that push in the right direction as a whole."

    The more interesting question at this point, sources said, is what will happen in the Senate?

    Though retirement security is a bipartisan issue, "people vote against things, or stymie them, or block progress for reasons other than the substance of a bill all the time," Mr. Kreps said. "I don't know if this will get tied up in larger politics, but it does seem that it can at least clear the House and move onto the Senate."

    Sens. Rob Portman, R-Ohio, and Ben Cardin, D-Md., last year introduced the Retirement Security and Savings Act, which includes many of the same provisions as Messrs. Neal and Brady's House bill. In a statement supporting the Neal-Brady bill, Mr. Portman said he looks forward "to working with Senate Finance Committee Chairman (Ron) Wyden, (D-Ore.) and Ranking Member (Mike) Crapo, (R-Idaho) on our legislation in the coming weeks to help make it easier for all Americans to save for retirement."

    Attached to larger legislation

    In order for a SECURE Act. 2.0 bill to pass the Senate, it's likely that the bill will be attached to a larger piece of legislation, said Bradford P. Campbell, a Washington-based partner for Faegre Drinker Biddle & Reath LLP and former assistant secretary of labor for EBSA during President George W. Bush's administration. In 2019, the SECURE Act passed after it was attached to a year-end spending bill.

    "There are just some realities of the legislative process that make even widely supported bipartisan legislation sometimes difficult to move," Mr. Campbell said. "So attaching it to a broader vehicle is sometimes the best way to resolve those issues, but you have to have a larger vehicle that's moving and that's appropriate for it to be attached to."

    He said it's unlikely the bill will be passed through budget reconciliation in the Senate — a process that requires only a simple majority to pass instead of the traditional 60 votes — because reconciliation can only be used on spending-related items and some of the retirement security provisions would not qualify. Also, using budget reconciliation typically means the item being voted on does not have broad bipartisan support.

    It's more likely the Senate will see what version of the bill passes the House and then use that as a jumping off point, said Mr. Kreps, who served as the senior pensions and employment counsel for the Senate HELP Committee from the 110th Congress through the 114th Congress. The Senate can then modify the bill and attach it to a larger vehicle at some point during the year, he added.

    Both Mr. Portman in the Senate and Mr. Brady in the House have announced that they will not seek re-election in 2022. Ms. Kahn said it would be a "great farewell gift to get some of this major legislation that they've been championing across the finish line."

    Mr. Campbell said Messrs. Portman and Brady's impending retirements and the support from both powerful Republicans and Democrats is a good recipe for the bill's success.

    "Nothing is ever certain, but I think this bill is very likely to pass," Mr. Campbell said. "The goal is pretty likely; how you get there is still up in the air."

    Related Articles
    SECURE Act doesn’t erase all retirement income worries
    Consultants predict more coverage from SECURE Act
    Recommended for You
    us_capitol_oct_2020_1550-main_i.jpg
    Senate Finance Committee floats SECURE 2.0 companion
    Scott_Tim_i.jpg
    Senators introduce bipartisan auto-portability bill
    ONLINE_180719869_AR_0_KOIYDHASJVBQ.jpg
    House passes financial services diversity package
    An Active Approach to US Mid-Cap Equities for DC Plans
    Sponsored Content: An Active Approach to US Mid-Cap Equities for DC Plans

    Reader Poll

    June 6, 2022
    SEE MORE POLLS >
    Sponsored
    White Papers
    Nearing the finish line: Ideas on end-state investing for corporate DB plans
    The Meaning of "Portfolio Intelligence"
    Credit Indices: Closing the Fixed Income Evolutionary Gap
    Forever in Style: Benchmarking with the Morningstar® Broad Style Indexes℠
    Crossroads: Politics, Inflation, & Bonds
    Is there a mid-cap gap in your DC plan?
    View More
    Sponsored Content
    Partner Content
    The Industrialization of ESG Investment
    For institutional investors, ETFs can make meeting liquidity needs easier
    Gold: the most effective commodity investment
    2021 Investment Outlook | Investing Beyond the Pandemic: A Reset for Portfolios
    Ten ways retirement plan professionals add value to plan sponsors
    Gold: an efficient hedge
    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
    June 20, 2022 page one

    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.

    About Us

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

    Chicago Office
    130 E. Randolph St.
    Suite 3200
    Chicago, IL 60601

    Contact Us

    Careers at Crain

    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
    • Privacy Request
    Pensions & Investments
    Copyright © 1996-2022. Crain Communications, Inc. All Rights Reserved.
    • Topics
      • Alternatives
      • Consultants
      • Coronavirus
      • Courts
      • Defined Contribution
      • ESG
      • ETFs
      • Hedge Funds
      • Industry Voices
      • Investing
      • Money Management
      • Opinion
      • Partner Content
      • Pension Funds
      • Private Equity
      • Real Estate
      • Russia-Ukraine War
      • SECURE Act 2.0
      • Special Reports
      • White Papers
    • Rankings & Awards
      • 1,000 Largest Retirement Plans
      • Top-Performing Managers
      • Largest Money Managers
      • DC Money Managers
      • DC Record Keepers
      • Largest Hedge Fund Managers
      • World's Largest Retirement Funds
      • Best Places to Work in Money Management
      • Excellence & Innovation Awards
      • WPS Innovation Awards
      • Eddy Awards
    • ETFs
      • Latest ETF News
      • Fund Screener
      • Education Center
      • Equities
      • Fixed Income
      • Commodities
      • Actively Managed
      • Alternatives
      • ESG Rated
    • ESG
      • Latest ESG News
      • The Institutional Investor’s Guide to ESG Investing
      • ESG Sustainability - Gaining Momentum
      • Climate Change: The Inescapable Opportunity
      • Impact Investing
      • 2022 ESG Investing Conference
      • ESG Rated ETFs
    • Defined Contribution
      • Latest DC News
      • DC Money Manager Rankings
      • DC Record Keeper Rankings
      • Innovations in DC
      • Trends in DC: Focus on Retirement Income
      • 2022 Defined Contribution East Conference
      • 2022 DC Investment Lineup Conference
    • Searches & Hires
      • Latest Searches & Hires News
      • Searches & Hires Database
      • RFPs
    • Performance Data
      • P&I Research Center
      • Earnings Tracker
      • Endowment Returns Tracker
      • Corporate Pension Contribution Tracker
      • Pension Fund Returns Tracker
      • Pension Risk Transfer Database
      • Future of Investments Research Series
      • Charts & Infographics
      • Polls
    • Careers
    • Events
      • View All Conferences
      • View All Webinars
      • 2022 Retirement Income Conference
      • 2022 Managing Pension Risk & Liabilities
      • 2022 WorldPensionSummit