The Securing a Strong Retirement Bill (SECURE 2.0) was passed unanimously by the House Ways and Means Committee on May 5, 2021. It enjoys broad bipartisan support, but it is still unclear. what his adoption path might look like. The Senate is working on its own versions of pension legislation, which are similar but not identical. The budget reconciliation bill seems the most likely way to pass this year, but Democrats may prefer to keep the revenue from budget reconciliation to back provisions that do not enjoy bipartisan support. In addition, certain provisions of SECURE 2.0 may not be eligible for budget reconciliation. Most commentators seem to think the legislation will somehow get passed this year, but aren’t sure exactly how it will happen.
Building on the provisions of the SECURE law enacted in 2019, SECURE 2.0 contains many popular provisions that should help people save for retirement. The criticisms focus mostly on some of the complexity associated with some of the phased introductions and phased out and whether that will really have a significant impact on people who don’t save enough for retirement.
While most commentators expect a retirement program to be adopted by the end of the year, it is uncertain what form it will take. It appears that SECURE 2.0 as passed by the Ways and Means Committee is likely to be changed somewhat by the Senate, either by substituting its own bill or by changing the Ways and Means version.
With SECURE 2.0 continuing not to require employers to offer pension plans and continuing to allow employees to opt out of pension plans that are offered, there remains concern about its effectiveness in increasing retirement savings for the future. the average employee. Mandatory proposals, such as the Senate Automatic IRA plan, may fall victim to a legal challenge that they violate ERISA pre-emption standards for voluntary compliance. The state’s automatic IRA plans have survived legal challenges because they are administered by a state and not taxed on private employers.
Congress has a lot on the agenda this fall, and hopefully these pension reforms don’t somehow fall through the cracks.
In the meantime, here are some of the main provisions of the potential legislation.