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Ways & Means to Move on Retirement Security and IRS Reform Bills

Government Affairs

The House Ways & Means Committee will consider legislation on April 2 to expand retirement savings opportunities and reform the IRS’s administration and operating procedures, according to multiple press reports.  

The outline for the legislation – the “Chairman’s mark” – could be released as soon as March 28 by Committee Chairman Rep. Richie Neal (D-MA). It is anticipated the Chairman’s mark will include components of the Retirement Enhancement and Savings Act (RESA), which received bipartisan support in both the House and Senate for the past two years, but has yet to be enacted. 

RESA was reintroduced in the House on Feb. 6 by Reps. Mike Kelly (R-PA) and Ron Kind (D-WI), who both serve on the Ways & Means Committee. Key provisions in RESA include allowing unrelated employers to adopt a multiple employer plan (MEP), providing for greater flexibility for a business to adopt a safe harbor 401(k) plan and giving employers additional time to adopt a qualified retirement plan for the prior year.  

RESA also provides a tax credit of up to $5,000 to defray the cost of starting a retirement plan, adds an additional tax credit for plan designs with an automatic enrollment feature, and removes the 10% cap on automatic employee contribution rate increases.

It’s also possible that Chairman Neal could include his Automatic Retirement Plan Act (ARPA) to require all but the smallest employers to maintain a 401(k) plan for their employees or components from his Retirement Plan Simplification and Enhancement Act (RPSEA) legislation. 

As for IRS reform, the committee probably will consider legislation similar to what was approved by the House last year to overhaul the IRS’s operations and tax administration systems and implement new taxpayer protections. In April 2018, the House approved the Taxpayer First Act (H.R. 5444) by a unanimous vote of 414-0, but it was never considered by the Senate.