Americans may soon see improvements to the retirement system that will help them not only save more of their money but save in smarter ways.
The Securing a Strong Retirement Act of 2021 (SSRA) was introduced Monday and passed by the U.S. House Ways and Means Committee today. Championed by Chairman Richie Neal and Ranking Member Kevin Brady, this 45-provision package is the next iteration in retirement policy on the heels of the enactment of the Setting Every Community Up for Retirement Enhancement Act of 2019.
The bill aims to build upon the current, successful system, and seeks to incentivize more workers to save. Through requiring automatic enrollments for new retirement plans, and automatically escalating workers’ contributions, the proposal seeks to leverage the employer-based system to increase savings. Additionally, by providing small businesses an incentive for up to five years to offer a retirement plan in the workplace, workers who sometimes lack the access to save will be given the opportunity.
Another provision allows employers to match their employees’ student loan repayment into their retirement account. Employers will be able to not only help overcome a barrier to retirement savings but utilize a key retention and recruitment tool.
Realizing the ramifications of the global pandemic on retirement savings, the bill also includes features to support savers close to retirement, increasing catch-up contribution limits for those that are ages 62-64. It also increases the minimum distribution age in phases to age 75.
Neal and Brady understand the value of lifetime income and the importance of diversifying savings choices. The bill improves rules related to longevity annuities and eliminates other barriers to annuities in qualified plans and IRAs, essential modernizations in our post-pension world.
The Committee’s support for SSRA signals again the bipartisan momentum for retirement security. It’s expected that the Senate will soon follow suit with the introduction of Senators Ben Cardin and Rob Portman’s Retirement Security and Savings Act of 2021, along with Senate Finance Committee action expected late summer/early fall.
Kathleen Coulombe serves as the Senior Vice President, Federal Relations, for the American Council of Life Insurers (ACLI). In this capacity, she is actively involved in a multitude of public policy issues on Capitol Hill that impact the life insurance industry.
