On May 23, the U.S. House of Representatives passed a bill that would directly impact retirement benefits across the nation. The bill, entitled the Setting Every Community Up for Retirement Enhancement Act (SECURE Act; HR 1994), would make changes to both employer-sponsored retirement plans and individual retirement accounts, most notably:
- Expand the ability of employers to partner together to offer multi-employer retirement plans, even across industries;
- Increase the available tax credit for small employers to offset plan start-up costs, and add a new $500 tax credit to help small employers encourage automatic enrollment;
- Raise the minimum age for required minimum distributions from retirement savings plans from 70 ½ to 72;
- Ease safe harbor requirements to encourage employers to offer annuity options within a 401(k) plan;
- Require defined contribution plans to provide a lifetime income disclosure to participants every 12 months;
- Allow part-time workers to become eligible for enrollment in 401(k) plans following an eligibility period;
- Require beneficiaries of IRAs to withdraw all plan assets within a set period of time (generally 10 years) after the death of the account holder.
With nearly unanimous support in the House (417 – 3), the bill seems likely to pass the Senate as well, although modifications may be requested. The version of the bill passed by the House can be found here.
Feel free to reach out to your Foster & Foster consultant with any questions you may have.