A bipartisan group of congressional leaders is seeking public feedback on a discussion draft bill containing a host of technical corrections and clarifications pertaining to SECURE 2.0.
Shortly after the comprehensive retirement security package was signed into law in December 2022, industry stakeholders noticed some inadvertent errors.
One such "technical glitch" was found after lawmakers inadvertently dropped language from the bill's final text on catch-up contributions. The omission of a subparagraph in Section 603 of the law effectively eliminated the ability of participants in 401(k), 403(b) and 457(b) plans to make catch-up contributions in pretax and Roth plans.
The provision intended to require that all catch-up contributions to defined contribution plans be made on a Roth basis, except for those made by individuals making $145,000 or less.
In August, the IRS released guidance delaying the provision's effective date for two years.
The draft bill released Dec. 6 fixes the original bill's error.
There are also corrections for provisions concerning starter 401(k) plans — the bill created a new plan design for employers and does not require employers to provide matching contributions; the treatment of student loan payments as elective deferrals for purposes of matching contributions; the modification of credit for small employer pension plan startup costs; and expanding automatic enrollment in retirement plans, among others.
Identical draft bills were introduced in the Senate and House by Senate Health, Education, Labor and Pensions Committee Chair Bernie Sanders, I-Vt., Ranking Member Bill Cassidy, R-La.; Senate Finance Committee Chair Ron Wyden, D-Ore.; Ranking Member Mike Crapo, R-Idaho; House Committee on Ways and Means Chair Jason Smith, R-Mo.; Ranking Member Richard Neal, D-Mass.; House Committee on Education and the Workforce Chair Virginia Foxx, R-N.C.; and Ranking Member Bobby Scott, D-Va.
