The Ways and Means Committee in the U.S. House of Representatives recently announced the introduction of a bill that sets to increase options and flexibility for participants in defined contribution plans like 401(k)s and Individual Retirement Accounts (IRAs). The “Securing a Strong Retirement Act of 2020,” also includes several tax cuts for families and businesses, and provides more flexibility for minimum distributions so that they can continue saving for longer.
Among the provisions of the Securing a Strong Retirement Act of 2020:
- Automatically enrolls most employees of small businesses with more than 10 employees in new defined contribution plans, including 401(k) and SIMPLE plans, giving employees at least 90 days to unenroll if they so choose.
- Establishes a new tax credit and expands an existing tax credit to encourage small employers to offer defined contribution retirement plans.
- Increases the income limit for the Saver’s Tax Credit.
- Enhances Allows employers with 403(b) plans, including public schools and tax-exempt organizations.
- Increases the catch-up contribution limit to IRAs for those aged 50 and over by indexing it to inflation.
- Allows individuals to pay down a student loan instead of contributing to a 401(k) plan and still receive an employer match in their retirement plan.
- Extends the Start-Up Tax Credit to provide an incentive for employers to join together to provide their employees a retirement plan.
The Securing a Strong Retirement Act of 2020 bundles together a number of common-sense reforms and changes that will benefit Americans’ financial options and stability. Good to see that Ways and Means Committee Chairman Richard E. Neal (D-MA) and Ranking Member Kevin Brady (R-TX) worked together for these positive changes. HLF encourages Members of the U.S. House to support this bill.
