Retirement overhaul part of $1.7T government spending package

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Retirement spending bill overview: 

• Who: A bill called The Secure Act of 2022 that is aimed at overhauling retirement policy is included in Congress’ proposed $1.7 billion spending package. 
• Why: Secure 2.0, as the bill is called for short, could potentially get signed into law this week and would expand access to employer-sponsored retirement plans. 
• Where: Nationwide. 

A bill overhauling retirement policy has been included in Congress’ proposed $1.7 trillion spending package that was introduced on Tuesday. 

The legislative package—officially called The Secure 2.0 Act of 2022—expands on a project that began in 2019 following the passing of the Secure Act. 

Secure 2.0—which could potentially get signed into law sometime this week— is the result of negotiations between the House and Senate and would expand access to employer-sponsored retirement plans, reports Law360. 

A previous version of Secure 2.0—of which the current version is a compromise of—was reportedly passed by the House earlier this year, while draft legislation cleared two Senate committees but never obtained a full vote in the upper chamber.

Secure 2.0 would also add new incentives for employer-sponsored retirement plans and includes language that aims to grow the number of employer plan participants and increase the way both employers and workers can give to tax-favored savings, reports Law360. 

Secure 2.0 would increase minimum distribution age for individual retirement accounts

The retirement bill would also increase the minimum distribution age for individual retirement accounts, with the age raised from 72 to 73 at the start of 2023 and then to the age of 75 in 2033.

Secure 2.0 will also include, among other things, automatic enrollment provisions that were previously passed by the full chamber in March, reports Law360.

The automatic enrollment provisions will reportedly mandate that employers that create new defined contribution plans such as 401(k) and tax-sheltered 403(b) plans must automatically enroll eligible employees. 

Additionally, Secure 2.0 directs the U.S. Department of Labor to create a lost-and-found national database for retirement savings that would have the contact information for administrators of 401(k) and pension plans, reports Law360. 

L Brands, the former parent company of Victoria’s Secret and Bath & Body Works, agreed in August to pay $2.75 million to resolve claims the company mismanaged employees’ 401k retirement plans. 

Are you enrolled in an employer-sponsored retirement plan? Let us know in the comments! 

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