If the Setting Every Community Up for Retirement Enhancement (SECURE) Act was an engine empowering more people to save for retirement, then the Securing a Strong Retirement Act of 2020 (SSRA) is the rudder. The bill, introduced by House Ways and Means Chairman Richie Neal and Ranking Member Kevin Brady last week, will help steer retirement savers on a path to financial security.
The SSRA’s dozens of provisions build upon the success of the SECURE Act, which members of Congress passed last year with broad-based support, helping to create more than 700,000 new savers. Features like automatic enrollment, a tried and true savings tool, would be a standard retirement plan requirement. This year’s bill also improves the Savers Credit, increasing it to $1,500 per year ($3,000 for married filing jointly).
Employers would also be able to provide a retirement savings “match” in the amount of their employees’ student loan payments. This is a smart provision that seeks to overcome the student debt hurdle millions of Americans face when saving for retirement.
To encourage smaller businesses to offer a retirement plan, SSRA would increase the start-up tax credit from 50% of administrative costs to 100% for businesses with 50 or less employees. There is also an incentive for employers to contribute to their employees’ retirement accounts for the first five years the plan is in place.
Aside from revving up workplace savings, other key provisions ensure those close to or in retirement can continue to save and better manage their retirement savings accounts. It increases the catch-up limit for those over age 60 and delays required payouts to age 75. These changes help savers address the financial challenges of the COVID-19 pandemic. The SSRA also removes barriers to the only product that ensures retirees do not outlive their savings – annuities – while smartly modernizing rules for longevity and other types of annuities.
While the SSRA is just starting out as a legislative proposal, there is widespread support for the bill on Capitol Hill and among stakeholders, and it will be a leading legislative priority in the 117th Congress.
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.
