Retirement-Focused RISE & SHINE Act Clears Senate HELP Committee

The Senate Health, Education, Labor and Pensions Committee has voted to advance the Retirement Improvement and Savings Enhancement to Supplement Healthy Investments for the Nest Egg Act, known as the RISE & SHINE Act.

Supporters of the bill say it will improve retirement security by creating additional protections for workers and retirement savers at all stages of their retirement timelines. As passed by the HELP Committee, the bill includes many interrelated provisions. Among these are measures to expand plan coverage for part-time workers and a new rule allowing employers to set up automated payroll deduction emergency savings accounts for their workers.  

Passage of the RISE & SHINE Act comes some three months after the House of Representatives passed a comprehensive retirement bill with an overwhelming bipartisan vote. The House bill, known as the Securing a Strong Retirement Act, similarly seeks to expand access to workplace retirement plans and protected lifetime income products. It would also expand automatic enrollment by requiring 401(k), 403(b) and SIMPLE plans to automatically enroll participants upon becoming eligible, with the ability for employees to opt out of coverage.

While it covers some of the same areas as the House’s bill, the RISE & SHINE Act is a distinct measure. It is also different from additional retirement legislation expected to be taken up in the near future by the Senate Finance Committee.

Some features in the RISE & SHINE Act include new permissions for plan sponsors to auto-enroll their workers in salary deferral emergency savings accounts, with a maximum auto-enrollment contribution of 3%. Another portion of the bill would require that certain part-time employees who have served 500 hours or more in the prior two years be made eligible for participation—though such workers could still be excluded from plan eligibility for reasons other than their part-time status.

According to a statement from Wayne Chopus, president and CEO of the Insured Retirement Institute, the HELP Committee measure is expected to be combined with the Finance Committee measure into one Senate bill. Per the statement, the combined Senate bill would then need to be reconciled with the House-passed legislation before a final bill can be voted on by both chambers of Congress and sent to President Joe Biden for signature. Chopus said this outcome will require a substantial amount of work by legislators over the coming weeks and months, but he believes Congress can get the job done and build on the legacy of 2019’s Setting Every Community Up for Retirement Enhancement Act.

“This is a critical milestone toward addressing the anxiety and insecurity that many of America’s workers and retirees have about achieving a financially secure retirement,” Chopus said in the statement. “We appreciate the leadership and hard work of Committee Chair Senator Patty Murray [D-Washington] and Ranking Member Senator Richard Burr [R-North Carolina] to craft and pass this important bipartisan measure.”

Eric Pan, CEO of the Investment Company Institute, says in a written statement that the unanimous vote to advance the RISE & SHINE Act shows that the Senate is working hard to join the House in passing much-needed legislation to expand access to retirement savings plans and improve Americans’ ability to save. Per the statement, the ICI looks forward to the Senate Finance Committee adding to the legislation, and the group hopes to see consideration by the full Senate of a bipartisan retirement-savings reform package “as soon as is practicable.”

In addition to the RISE & SHINE Act, the HELP Committee also advanced the Increasing Small Business Retirement Choices Act. As passed by the HELP Committee, the legislation would make it easier for small businesses to offer more comprehensive retirement benefits to their workers by reducing administrative expenses. According to the bill’s supporters, currently, employers who offer 401(k) retirement plans and want to consider a plan design change, such as the implementation of auto-enrollment or auto-escalation, must pay out-of-pocket administrative costs upfront, even if such changes might help employees save more money. The bill would change existing law to allow small business employers to use retirement plan funds to pay expenses associated with retirement plan design changes, potentially lowering the cost of providing better plans to workers.

Chopus said he remains optimistic that Congress will send a retirement bill to President Biden this year, noting that Tuesday’s legislative action means Congress is “more than halfway through the process, and momentum is on our side.”

Public comment letters from retirement security organizations—including the ERISA Industry Committee, Insured Retirement Institute, Pension Rights Center and U.S. Chamber of Commerce—broadly support the RISE & SHINE Act.

The text of the legislation is available here.