Trio of Senators Introduces Retirement Reform Bill

A bipartisan trio of senators has introduced a bill called the Improving Access to Retirement Savings Act, which, among other goals, would extend new retirement plan choices to nonprofit groups and expand/clarify incentives to encourage small businesses to offer plans to their employees.

The legislation parallels, but does not exactly match, the Securing a Strong Retirement Act, a piece of legislation which was recently introduced in the House of Representatives and which received a unanimous affirmative vote from the House Ways and Means Committee. Lawmakers in the House have taken to calling that bill “SECURE 2.0,” recognizing how it builds on the Setting Every Community Up for Retirement Enhancement (SECURE) Act.

Sponsors of the Improving Access to Retirement Savings Act include Senator Chuck Grassley, R-Iowa; Senator Maggie Hassan, D-New Hampshire; and Senator James Lankford, R-Oklahoma. The trio says their bill provides common sense, bipartisan solutions that will help address the challenges and obstacles that continue to inhibit adequate savings and make it difficult for people to manage their incomes during retirement.

Passage of SECURE 2.0 in the full House and passage of the Improving Access to Retirement Savings Act in the Senate could lead to a reconciliation process that would eventually see a compromise piece of legislation become law. According to Paul Richman, chief government and political affairs officer at the Insured Retirement Institute (IRI), the chances for bipartisan retirement reform taking place this year now appear even greater. 

“Congress continues to signal strong, bipartisan interest in improving retirement savings opportunities and lifetime income choices for workers and retirees,” Richman says, citing two key provisions of the new bill.

First, he explains, the bill would encourage nonprofit organizations to offer employee retirement benefits by providing those groups with the same access to pooled employer plans (PEPs) that the SECURE Act offered to small businesses. Second, the bill clarifies when a small businesses can use a tax credit to help facilitate offering retirement plans to their employees if they join a multiple employer plan (MEP) or PEP.

“This clarification will encourage more small businesses to offer a retirement plan and facilitate greater use of MEPs or PEPs as the means to provide that plan,” Richman says. “With the Senate and the House introducing comprehensive retirement security legislation, IRI urges both chambers of Congress to work together and quickly act to bolster retirement security.”

Another feature of the Improving Access to Retirement Savings Act allows for a grace period to correct reasonable errors committed by parties administering automatic enrollment and automatic escalation features when groups are enrolling in a MEP, provided they are corrected within nine and a half months of the end of the year in which the mistakes were made.

Commenting on the filing of the legislation, Grassley says the bill will help more Americans save for their retirement while also giving small businesses and nonprofits another avenue to invest in their employees’ future financial security.

“Government should be doing everything it can to help Americans save more of their own hard-earned money,” Grassley says.

“No American should have to worry about affording retirement after a lifetime of hard work,” Hassan adds. “That’s why I have joined my colleagues on both sides of the aisle in introducing this commonsense bill that helps expand retirement options.”

Lankford says the policies covered in the legislation will make it easier for employers to offer retirement plans, improve overall accessibility and encourage retirement saving for employees.

“By making sensible updates to the law, this legislation makes it easier for small businesses and nonprofits to offer plans and expand access, which gives Oklahomans the freedom to save more of their money for retirement sooner,” Lankford says.

Govtrack.us has published the full text of the proposed legislation here.