House Passes Retirement Legislation

This week, the U.S. House of Representatives passed the “Setting Every Community up for Retirement Enhancement (SECURE) Act,” a bill intended to encourage small businesses to provide retirement benefits for their workers.

The legislation would make it easier for smaller employers to join open multiple-employer plans and create a new tax credit of up to $500 for companies that set up plans with automatic enrollment. It would also ease non-discrimination rules for frozen defined benefit plans and add a safe harbor for selecting lifetime income providers in defined contribution plans.

The legislation would also increase the minimum distribution age from 70.5 to 72 and the auto-enrollment safe harbor cap from 10% to 15%. The legislation also includes a provision that would require employers to allow long-term, part-time workers to participate in workplace 401(k) plans.

The legislation now moves to the U.S. Senate. The Senate could consider the “SECURE Act” or its own retirement legislation and eventually attempt to merge the two via a conference committee.

Wyatt Stewart is Big “I” senior director of federal government affairs.