Setting Every Community up for Retirement Enhancement (SECURE) Act
On March 29, 2019, House Ways & Means Committee Chairman Richard Neal, D-Mass., introduced new bipartisan legislation, The Setting Every Community up for Retirement Enhancement (SECURE) Act of 2019, which eases the ability to offer annuities in 401(k) and 403(b) plans and raises the age for taking required minimum distributions from 70 1/2 to 72.
The SECURE Act has wide bi-partisan support in both houses of Congress and the House is expected to vote on it before a Memorial Day recess period.
The SECURE Act incorporates measures from the previous bill dubbed the Retirement Enhancement and Savings Act, or RESA.
The SECURE Act would:
- Create a safe harbor that employers (or designated Fiduciaries) could use when they’re choosing group annuity issuers to support defined contribution plan lifetime income stream options
- Help a plan participant transfer a plan lifetime income feature from one plan to another employer-sponsored retirement plan, or to an individual retirement account (IRA)
- Require plan sponsors to tell the participants about how much lifetime income monthly retirement income their assets might produce
- IRA modifications:
- Raises the age for taking required minimum distributions (RMD) from 70 1/2 to 72
- Let people contribute to IRAs – with no age restriction
- To offset the revenue reduction cost, the distribution period for non-spouse designated beneficiaries would be limited to 10 year rather than the beneficiary’s lifetime
- Provide a tax credit for a small employer that starts a new retirement plan with an automatic enrollment feature
- Allow small employers to participate in defined contribution multiple employer plans (MEP’s) retirement plans