Capitol Hill Lame Duck Preview

In a Nov. 11 webinar, American Retirement Association Director of Legislative Affairs Andrew Remo took at look at where current legislative proposals stand in the wake of the elections. 

Currently, Congress is in a “lame duck” session, the period between the election and the end of the 116th Congress next month. Often, not much takes place during a lame duck session; this year, however, there are some outstanding proposals and measures that are prominent and will at least draw continued attention, if not action. 

COVID Relief

One of the proposals that generated considerable discussion before the elections is another package of COVID relief. Remo noted that there still is a wide gulf between the Democrats, who control the House, and the Republicans, who control the Senate, concerning the provisions of that proposed measure and the amount of money it would entail. In addition, he observed, relations have been bad between the House leadership and Treasury Secretary Steve Mnuchin on the matter. 

There may be a ray of hope for further COVID relief courtesy of a bill to keep the government funded—and functioning. “They’ll have to at least discuss government funding,” said Remo, noting that federal government funding is now set to run out on Dec. 11. It’s possible, he said, that COVID relief could be tacked on to omnibus legislation to keep the government funded. 

SECURE 2.0 

The Securing a Strong Retirement Act (SSRA), also known as “SECURE 2.0,” is a new bipartisan comprehensive retirement policy bill that Remo said is even bigger than the original SECURE Act enacted last December. He noted that it is sponsored by House Ways & Means Chairman Richard Neal (D-MA) and Ranking Member Kevin Brady (R-TX), something that Remo indicated gives it added heft. “It’s something to pay attention to as the real deal,” Remo said, when a committee’s chairman and ranking member both sponsor a measure.

The bill has five titles consisting of 36 separate sections: coverage, income preservation, simplification, SECURE Act technical corrections and administration. 

Remo characterized the measure as a “marker” bill right now; no markup is imminent, and no “pay-fors”—provisions specifying where the money the bill spends would come from—are currently included. “It’s all the ‘goodies’” right now, Remo said, which is a sign that markup is not imminent. Further, he noted that the House Ways & Means Committee staff is soliciting feedback on the bill, and that there has been no public reaction to it from the Senate yet. 

Among the significant changes the SSRA would make, Remo observed, is that it would expand the universe of people covered by the saver’s credit “quite dramatically.” The bill calls for:

• a new single credit rate of 50% match up to $3,000 saved;
• an increase in the maximum credit amount from the current $1,000 per individual to $1,500 per individual;  and
• an increase in the income threshold eligible for the credit to $80,000 for joint filers, $40,000 for single filers and $60,000 for a head of household, phased down until $100,000 for joint fliers.

The most expensive provision in the bill, Remo said, is Section 105, which would make age 75 the new required beginning date for required minimum distributions (RMD)s. This provision, he said, would be a “huge revenue loss” and would be the “biggest revenue loss in the whole bill.”

Section 306 provides for a “retirement savings lost and found,” which Remo said “shows interest on the Hill in locating lost participants.” This section would require the Pension Benefit Guaranty Corporation to update its existing online database of lost accounts to include the unclaimed accounts of all former employees worth $6,000 or less, and allow employers to transfer to the PBGC the retirement accounts of former employees with a balance of less than $1,000, to be invested in U.S. Treasury securities. “I think there’s some work to be done” on this provision, Remo said. 

Another provision, Section 315, “essentially undoes” guidance that the Department of Labor issued regarding electronic dissemination of information to plan participants, Remo said. It would require at least one annual benefit statement to be delivered on paper unless the participant opts out from paper delivery; it also would impose a paper disclosure requirement once every three years for defined benefit plans.