In the past few years, Congress has passed a number of bills that change the rules around popular retirement investment accounts and strategies. Most significant among these so far is the SECURE Act, which became law in 2019.
While other retirement-related bills have stalled out since then, proposals continue to be made by lawmakers.
Most recently, the U.S. Senate introduced the RISE & SHINE Act (Retirement Improvement and Savings Enhancement to Supplement Healthy Investments for the Nest Egg). This proposal is the Senate’s version of the SECURE 2.0 Act, which was approved by the House in March 2022.
A brief history of SECURE
The original SECURE Act (Setting Every Community Up for Retirement Enhancement) went into effect on January 1, 2020. It includes 29 provisions in total. Some of the most notable changes included:
- Increasing the required minimum distribution starting age from 70 ½ to 72
- Allowing IRA contributions beyond age 70 ½ (assuming earned income)
- Requiring the total distribution of inherited IRAs to non-spousal beneficiaries within 10 years of the original account owner’s date of death
- Requiring employers to allow part-time employees who meet certain qualifications to enroll in the company 401(k) plan
In March 2022, the House passed the Securing a Strong Retirement Act of 2022 (popularly known as SECURE 2.0). This bill, if enacted into law, will include the following provisions:
- Expanding auto-enrollment provisions within employer-sponsored retirement plans
- Further delaying the RMD starting age
- Increasing catch-up contribution limits for individuals ages 62 through 64
- Allowing SEP/SIMPLE IRA participants to make Roth contributions
- Allowing employer match contributions to be designated as Roth contributions
- Requiring catch-up contributions to be designated as Roth contributions
The Senate answers with RISE & SHINE
The other half of Congress has not yet decided on SECURE 2.0.
However, the Senate Committee on Health, Education Labor & Pensions (HELP) recently introduced its own version of SECURE 2.0, called RISE & SHINE, which includes, among other provisions:
- Automatic re-enrollment of employees who declined to participate in an employer-sponsored retirement plan every three years
- Reducing the years of service requirement for part-time employees to participate in an employer-sponsored retirement plan (from three years to two years)
- Permitting employers to offer emerging savings accounts linked to pension plans of up to $2,500
It should be noted that the Senate Finance Committee will also be releasing its own proposed bill later this year. Experts say that the two proposals will likely make up the Senate’s version of SECURE 2.0.
Finding it hard to keep up?
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[…] quick action by Senate committees on both the EARN Act and the RISE AND SHINE Act (which we wrote about here) suggests that Congress could indeed be poised to take action on retirement law […]