Over the past couple of years, the retirement plan industry saw the introduction of legislation that would be what is considered the biggest overhaul of the industry since passage of the Pension Protection Act in 2006.
Eventually dubbed the Setting Every Community Up for Retirement (SECURE) Act, it seemed at first the overhaul would become a reality quickly as the House passed the legislation soon after committee review. However, a stall in the Senate made many speculate whether the act would pass by years-end.
Its eventual passage hastily occurred last week, with legislators including most provisions in the budget bill President Trump signed December 20, in order to avoid another government shutdown. Now the industry is abuzz with what the legislation means for plan sponsors, providers and advisers in 2020 (more about that later) and beyond.
“The bill will make it easier for employers to provide both their full and part-time employees with the opportunities to save with workplace retirement plans, says Paul Richman, IRI chief government and political affairs officer. It’s going to make retirement plans more available to American workers through their open MEPs provision, which can create 700,000 new retirement accounts through that provision alone.”
The retirement industry will find some answers in the news coverage below:
SECURE Act Contains Provisions Lawmakers Have Pushed for Years
The legislation would remove the automatic enrollment/escalation safe harbor cap,under Section 401(k) of the Code, require benefit statements provided to defined contribution plan participants to include a lifetime-income disclosure at least once during any 12-month period, create a new fiduciary safe harbor for selection of lifetime income providers, and modify the nondiscrimination rules with respect to closed defined benefit plans. Read more.
Industry Enthusiasm, Questions About SECURE Act Timeline
In the near term, some of the more modest provisions of the SECURE Act will probably be the most influential, sources agree, but over time the industry impact could be profound. Read more.
Congress Has Passed the SECURE Act
The Senate voted Thursday to approve appropriations legislation that has subsumed the SECURE Act, after the House approved the same measure on Tuesday. Read more.
How the SECURE Act Will Impact 403(b) Plans
Sponsors can distribute assets from a 403(b)(7) custodial account, along with other measures. Read more.
It’s Time to Improve Retirement Outcomes, Now
Enactment of the SECURE Act will be transformational for the retirement ecosystem, helping to secure the financial future for American workers at employers of all sizes and across all sectors. Read more.
Changes the Retirement Plan Market Could See With Open MEPsFor retirement plan advisers, passage of open MEP legislation could change relationships with plan sponsors and providers, as well as create the need for new distribution models. Read more.