There are many good reasons why the Senate should pass the Setting Every Community Up for Retirement (SECURE) Act. Its retirement security provisions would make it easier for small employers to sponsor a retirement plan, encourage employees to save more, and clarify critical retirement-related tax rules for church organizations and institutions
Interestingly, one of the best reasons to pass the SECURE Act doesn’t have anything to do with retirement.
Instead, it has everything to do with honor. And duty. And fairness.
Before the 2017 federal tax reform bill, survivor benefits paid by the U.S. government to the children of U.S. troops who died on duty were taxed at the same rate as their surviving parents.
But the tax reform package unintentionally changed the rules, mistakenly penalizing survivors of fallen soldiers. Benefits are now taxed at the same rate as family estate transfers, which is much higher. This abrupt change has doubled and tripled the tax burden for an estimated 18,000 Gold Star families, or worse.
As Jessica Braden-Rogers–whose husband Michael was killed in Afghanistan in 2012–recently told ABC News a potential $4,500 tax bill “could have paid for all of [my son’s] braces.” Her son’s tax bill is potentially quadruple the previous year.
Members of Congress have worked to correct this error and introduced bills to fix this. One of the bills was included in the SECURE Act, which the U.S. House of Representatives passed 417-3.
If the Senate would pass the SECURE Act, it would go to the president’s desk for his signature. Then, Gold Star families would no longer face this unfair financial burden.
Again, there are plenty of reasons why the Senate should pass the SECURE Act. It would prevent millions of people in private-sector pension plans from losing future benefits. It would expand access to retirement plans, especially for those working for small businesses. It would allow workers and retirees to contribute more to their retirement accounts.
And it would do the right thing for our fallen heroes.
The Senate returns to Washington D.C. next week and should pass the SECURE Act without delay.
Alane R. Dent served as Senior Vice President, Federal Relations for the American Council of Life Insurers (ACLI) until March 2020. She oversaw issues affecting the life insurance industry; including tax, retirement security, financial services, international affairs and life insurance products.
