Skip to main content

You are here

Advertisement

Senate to Vote on Bill to Bolster Retirement Savings

The Retirement Enhancement and Savings Act (RESA, S. 3471), which would amend the Internal Revenue Code to encourage retirement savings, was placed on the Senate’s legislative calendar by Sen. Orrin Hatch (R-Utah) Nov. 16.

Hatch, Chairman of the Senate Finance Committee, also placed the Miners Protection Act of 2016 (S. 3470) on the calendar. That bill would amend the Surface Mining Control and Reclamation Act to bolster to the United Mine Workers of America pension plan.

Both bills were approved by the Senate Finance Committee in September.

RESA contains provisions that address multiple employer plans and pooled employer plans (PEPs). The Modified Mark of the bill contains a proposal that would allow two or more unrelated private employers to adopt a defined contribution PEP as long as the PEP has a pooled plan provider (PPP) as the named fiduciary to the plan.

RESA also contains more than 30 other retirement-related provisions and cost offsets, including proposals that would:

  • encourage the use of lifetime income products by fleshing out the existing fiduciary safe harbor for the selection of a lifetime income provider;

  • provide that one ERISA-mandated plan participant statement per year include a lifetime income disclosure;

  • direct the Department of Labor to issue guidance within a year after the proposal is enacted illustrating a model lifetime income disclosure; and

  • allow plan participants to roll over their lifetime income investment to another retirement savings vehicle if the plan sponsor decides for whatever reason to discontinue that investment option in the plan — notwithstanding the existing distribution restrictions in employer-sponsored plans.

In a press release, Sen. Ron Wyden (D-Ore.), Ranking Member of the Senate Finance Committee, said that RESA contains “several smart improvements to pension law,” adding that, “This package will help more Americans find opportunities to save, and for the first time it gives workers the chance to keep building an IRA past the age of 70 and a half.”

Hatch also hailed the legislation in a press release. “These bills are the result of bipartisan cooperation by members from both sides of the aisle that will assist employers, beneficiaries and hard-working Americans,” he said. “Thanks to these bipartisan efforts, we now have a real opportunity to enact legislation that will allow open multiple employer plans for employees working for companies of all sizes, increasing access for a number Americans hoping to save for their future. I look forward to working with my colleagues in the Senate to further advance common-sense pension reforms, just like this, and ensure they are enacted into law.”

S. 3470 would transfer funds to the United Mineworkers Pension Plan and also provides for the inclusion of certain retirees in the Multiemployer Health Benefit Plan. Wyden warned that failure to enact S. 3470 would result in thousands of mineworkers and their families losing health benefits and pension benefits.

A summary of the Retirement Enhancement and Savings Act of 2016 can be found here.

The Finance Committee Report of the Retirement Enhancement and Savings Act of 2016 can be found here.

Estimated budget effects of the Retirement Enhancement and Savings Act of 2016 can be found here.

A summary of the Miners Protection Act of 2016 can be found here.

The Finance Committee Report of the Miners Protection Act of 2016 can be found here.