The Senate has its eye on bolstering retirement savings, months after the House approved the Secure Act 2.0.
The Senate Health, Education, Labor and Pensions Committee, also known as HELP, released a legislative draft that would encourage Americans to save more in emergency and retirement accounts as well as gain more widespread access to employer-sponsored accounts if they don’t already have one. The proposal is called the Retirement Improvement and Savings Enhancement to Supplement Healthy Investments for the Nest Egg Act, otherwise known as the RISE and SHINE Act.
“The COVID-19 pandemic was exactly the kind of crisis millions of families simply could not afford,” Senator Patty Murray, the HELP Committee Chair, said in a statement. “And this crisis has been even harder on the countless people who have never had access to a retirement plan, and have never even been paid enough to make ends meet – let alone save for their futures.” Murray, a Democrat from Washington state, and Ranking Member Senator Richard Burr, a Republican from North Carolina, released the draft on Thursday.
The final legislation is expected in the coming weeks, the Senate HELP Committee said. The RISE and SHINE Act will include provisions on employer-sponsored emergency savings accounts, an expansion of the multiple employer plan system, increased access to employer-sponsored retirement plans for part-time workers and greater transparency around pensions and their lump-sum buyout incentives.
The proposal is in line with the House’s Secure Act 2.0, also known as the Securing a Strong Retirement Act of 2021, which was passed in March. The Secure Act 2.0 is a follow-up to the Secure Act, expansive retirement legislation Congress passed in December 2019, which included tax incentives for small businesses to establish automatic enrollment into retirement plans as well as provisions around multiple employer plans and an increased age for required minimum distributions.
The House’s legislation builds on the Secure Act by increasing the age for required minimum distributions yet again, requiring auto-enrollment for eligible employees (who would have the option to opt-out) and creating a national database for lost retirement accounts, among other provisions.