Host Beth Garner talks to Norma Sharara, Managing Director, National Tax Office — Compensation & Benefits at BDO regarding the SECURE 2.0 Act of the House, the RISE & Shine Act of the Senate HELP Committee, and the as-yet-unnamed bill from the Senate Finance Committee, all aiming to supply greater access to workplace retirement. Beth and Norma discuss some of the provisions of each bill and how they differ, including a SECURE 2.0 provision for student loan debt.
Listen in to get information on bipartisan supported expected improvements to workplace retirement plans.
Key Takeaways:
[1:07] On March 29, the U.S. House of Representatives passed Secure 2.0 with a vote of 414-5.
[2:48] The Senate Committee on Health, Education, Labor, and Pensions (HELP) passed the Retirement Improvement and Savings Enhancement to Supplement Healthy Investments for the Nest Egg Act (RISE & SHINE Act).
[4:34] The Senate Finance Committee is considering over 1,000 changes to the House Secure 2.0.
[7:44] The original SECURE Act became law in December 2019, before COVID-19. It was the biggest change to retirement plan law since the Pension Protection Act of 2006. SECURE 2.0 seeks to add enhancements to the 2019 act.
[8:36] One change is increasing access to workplace retirement plans. Norma explains the differences in the House and Senate bills on mandatory enrollment. Another hot topic is emergency savings. SECURE 2.0 does not have a provision for emergency savings but RISE & SHINE allows a sidecar 401(k) account to build up for emergency use.
[10:10] Norma discusses changing the Required Minimum Distributions from starting at age 72 to rising to start at age 75. There are other provisions like allowing additional catch-up contributions, for those close to retirement age and making all contributions after-tax Roth.
[10:52] Other possible provisions are allowing employees to have their matching contribution be Roth, to pay tax on the matching contribution up front, and not at the withdrawal, electronic plan administration through email, Savers’ Credit being refundable to encourage people to save, and some additional tax credits for small businesses to offset startup costs.
