Senate Majority Leader Mitch McConnell is being pressured by Senators on both sides of the political aisle to take action on the Setting Every Community Up for Retirement Enhancement Act, commonly referred to as the “SECURE Act.”
The popular bipartisan bill passed the House earlier this year with a practically unanimous vote, but it has since been stalled in the Senate. In recent months, advocates have voiced hopes that the SECURE Act’s key provisions—for example supporting the establishment of open multiple employer plans and setting up an in-plan guaranteed income product selection safe harbor for retirement plan sponsors—could be folded into budget negotiations at the end of the year.
Sources tell PLANADVISER the SECURE Act’s holdup is more logistical than substantial. That is to say, with the GOP’s clear focus on making appointments to the judicial branch, there is actually a great premium on floor time for the remainder of this year. That’s why the Senate leadership initially pushed first for the SECURE Act’s passage under a loophole known as “unanimous consent.” In short, if a bill enjoys unanimous consent among every Senator, it doesn’t require any floor time. At this juncture, it appears three GOP Senators are refusing to allow the bill’s passage under unanimous consent: Ted Cruz, Mike Lee and Pat Toomey. Senator Cruz has concerns about certain 529 college savings plan provisions. Senator Lee has concerns about a provision that provides some relief for small community newspapers. And Senator Toomey has primarily voiced concerns about certain technical tax corrections that impacts retailers, which he wants to see addressed through floor debate and amendment.
Sources say none of the leadership in the Senate or the House opposes moving this bill in its current form into law. Nonetheless, this week, a group of seven prominent Republican senators took the step of mailing an open letter to Leader McConnell, publicly pressing him to work to get the SECURE Act passed into law this year. Signers of the letter include Republican Senators Tim Scott, Rob Portman, Thom Tillis, Joni Ernst, Martha McSally, Susan Collins and Cory Gardner.
“This bipartisan legislation would expand access to retirement plans for millions of Americans, especially those working for small businesses,” the letter states. “It would allow older workers and retirees to contribute more to their retirement accounts. It would increase 401(k) coverage to part-time employees. It would prevent as many as 4 million people in private-sector pension plans from losing future benefits for which they have worked and planned. The legislation would protect 1,400 religiously affiliated organizations whose access to their defined contribution retirement plans is in jeopardy. The SECURE Act also does the right thing for Gold Star families. It would correct unfair tax treatment of the survivor benefits of more 18,000 children and spouses of fallen service members.”
The Senators further emphasize SECURE Act provisions aim to help new parents, including those adopting, with expenses by allowing tax-free distributions of retirement savings.
“This legislation builds on the Senate’s version of the bill, the Retirement Enhancement and Savings Act (RESA), sponsored by our colleagues Senator [Chuck] Grassley and Senator [Ron] Wyden,” the letter states. “During the 114th Congress, RESA was approved unanimously by the Finance Committee. We encourage the Senate to take action on the SECURE Act as soon as possible. Doing so would demonstrate to our constituents that the Senate can lead in a bipartisan way for workers saving for retirement, for tax fairness and for family financial security.”