- Retirement Security: Building A Better Future (May 13, 2021)
National Savings Proposals
- To view federal legislation proposing national savings solutions, see prior sessions.
Other Reform Proposals
Securing a Strong Retirement Act of 2021
Introduced as H.R. 2954 by Representative Richard E. Neal (D-MA) and Representative Kevin Brady (R-TX) on May 3, 2021. This bill closely follows the prior version as H.R. 8696 introduced on October 27, 2020. The bill was marked up in Committee on May 5, 2021.
This bill builds on the Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019 to further improve workers’ long-term financial wellbeing. This bill would:
- Promote savings earlier for retirement by enrolling employees automatically in their company’s 401(k) plan, when a new plan is created;
- Create a new financial incentive for small businesses to offer retirement plans;
- Increase and modernize the existing federal tax credit for contributions to a retirement plan or IRA (the Saver’s Credit);
- Expand retirement savings options for non-profit employees by allowing groups of non-profits to join together to offer retirement plans to their employees;
- Offer individuals 60 and older more flexibility to set aside savings as they approach retirement;
- Allow individuals to save for retirement longer by increasing the required minimum distribution age to 75;
- Allow individuals to pay down a student loan instead of contributing to a 401(k) plan and still receive an employer match in their retirement plan;
- Make it easier for military spouses who change jobs frequently to save for retirement;
- Allow individuals more flexibility to make gifts to charity through their IRAs;
- Allow taxpayers to avoid harsh penalties for inadvertent errors managing an IRA that can lead to a loss of retirement savings;
- Protect retirees who unknowingly receive retirement plan overpayments; and
- Make it easier for employees to find lost retirement accounts by creating a national, online, database of lost accounts.
SIMPLE Plan Modernization Act
Introduced as S. 1272 by Senator Susan M. Collins (R-ME) and Senator Mark R. Warner (D-VA) on April 21, 2021.
This bill would:
- Raise the contribution limit for SIMPLE plans from $13,500 to $16,500 (halfway between current SIMPLE plans and traditional 401(k)s) for the smallestbusinesses (1 to 25 employees), with a corresponding increase in the catch-up limit from $3,000 to $4,750.
- Give businesses with 26 to 100 employees the option of the higher contribution limits, and, in order to continue to encourage them to transition to 401(k)s when they can do so, increase their SIMPLE plan mandatory employer contribution requirements by one percentage point if they elect the higher limits.
- Allow for a reasonable transition period for employers that grow beyond 25 employees.
- Make the limit increases unavailable if the employer has had another defined contribution plan within the past three years (to encourage businesses that already have qualified plans to retain them).
- Modernize SIMPLE plan form filing requirements and modify the transition rules from SIMPLE plans to traditional plans to facilitate and encourage such transitions.
- Direct Treasury to study the use of SIMPLE plans and report to Congress on such use, along with any recommendations.