The retirement trade acquired some welcome information late final yr when lawmakers handed one other main bipartisan retirement safety bundle, however trade sources aren’t anticipating 2023 to yield many extra legislative victories in terms of retirement points.
“Every part that they may discover the place there was bipartisan settlement made it into this invoice,” mentioned Michael P. Kreps, Washington-based principal and co-chairman of the retirement providers observe at Groom Regulation Group, about SECURE 2.0, a retirement safety invoice hooked up to a $1.7 trillion year-end spending invoice and signed into regulation Dec. 29.
“They did not depart rather a lot on the desk. Folks at all times provide you with new concepts and there might be new priorities, however with a brand new Republican management within the Home with their very own priorities, with out Chairman (Richard) Neal driving a retirement agenda, it is seemingly that retirement is not a front-burner concern, not less than for some time.”
SECURE 2.0, which builds off the unique SECURE Act that Congress handed in 2019, consists of dozens of provisions, together with increasing automated enrollment for workers becoming a member of 401(okay) and 403(b) plans, decreasing the eligibility requirement for part-time employees to hitch 401(okay) plans from three years of consecutive work to 2, and permitting employers to make matching contributions to a 401(okay) plan, 403(b) plan or SIMPLE IRA primarily based on certified pupil mortgage funds.
The SECURE 2.0 bundle was made up of three payments launched over the past Congress, together with one from Rep. Richard Neal, D-Mass., a longtime retirement safety advocate and chairman of the Methods and Means Committee final Congress, and the committee’s now-retired Rating Member Kevin Brady, R-Texas.
Retirement-related payments will seemingly nonetheless get launched within the new session that started Jan. 3 and continues via 2024, however the concern will not rank excessive on the precedence checklist in a divided Congress, sources mentioned.
One invoice that was introduced in December and is more likely to be reintroduced on this Congress would grant employees with out an employer-sponsored retirement plan entry to a federal program much like the $748.1 billion Thrift Financial savings Plan, the retirement system for six.7 million federal staff and members of the uniformed providers.
The bipartisan Retirement Financial savings for People Act, launched in each the Home and Senate, carefully follows a March 2021 paper revealed by the Financial Innovation Group, a bipartisan public coverage group, that argued the TSP could possibly be a mannequin to construct wealth for low-income employees.
John Lettieri, president and CEO of the Washington-based Financial Innovation Group, mentioned the invoice’s introduction late final yr was extra of a messaging automobile. “It is a approach of planting the marker … to generate curiosity and a focus and to generate suggestions from a wide range of stakeholders,” he mentioned in December. “Consider this as a gown rehearsal for a extra substantial effort within the new Congress.”
Mr. Neal has his personal automated enrollment invoice that may be reintroduced in some unspecified time in the future. Initially floated in late 2017, the Automated Retirement Plan Act would require employers that do not supply retirement plans to robotically enroll their employees in particular person retirement accounts or 401(okay)-type plans. Mr. Neal tried to incorporate the measure in Democrats’ Construct Again Higher Act, but it surely was stripped from the package during negotiations earlier than it handed in 2021.
Bradford P. Campbell, a Washington-based companion at regulation agency Faegre Drinker Biddle & Reath LLP and former assistant secretary of labor for the Worker Advantages Safety Administration throughout President George W. Bush’s administration, mentioned payments that try to enhance the retirement system reasonably have a greater likelihood of passing in Congress.
“We’ll see quite a few totally different payments that run the spectrum from making an attempt to tweak the present system to those who would essentially change the present system,” Mr. Campbell mentioned. “I feel the fact is the tweaking payments, so to talk, have a significantly better likelihood of success.”
