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House Overwhelmingly Backs SECURE Act; Focus Now Turns to Senate


UPDATED: May 24, 2019, at 9:30 a.m. (ET)

One of the most consequential pieces of retirement security legislation in more than a decade has been approved overwhelmingly by the U.S. House of Representatives.    

In a May 23 House floor debate that featured much praise and few objections, the Setting Every Community Up for Retirement Enhancement (SECURE) Act (H.R. 1994) was approved by a landmark vote of 417-3. The wide-ranging legislation, which draws from several bipartisan bills that were introduced but not enacted in the last Congress, improves upon the success of the private employer-based retirement system by seeking to make it easier for businesses to offer retirement plans and for individuals to save for retirement.

“We are pleased to see the House finally consider this long-standing, seemingly star-crossed legislation. Given the currently contentious climate in Washington, D.C., it is particularly gratifying to see that efforts to strengthen our nation’s retirement system can – at least on this issue – bring Democrats and Republicans together,” stated Brian Graff, CEO of the American Retirement Association, in hailing the bipartisan vote. 

Among other things, the legislation significantly increases the tax credit for new plans from the current cap of $500 to a more realistic $5,000. Small employers that implement an automatic enrollment feature in their retirement plan design would also be eligible for an additional $500 credit. Moreover, the SECURE Act eases the existing rules restricting multiple employer plans (MEPs) to allow two or more unrelated employers to join a pooled employer plan, producing economies of scale that can expand access and lower both employer and plan participant cost.

Other key provisions in the legislation include: 

  • simplifying the 401(k) safe harbor rules;
  • providing portability of lifetime income options; 
  • allowing long-term part-time workers to participate in 401(k) plans; 
  • allowing plans adopting by the filing due date to be treated as in effect as of close of year;
  • providing a fiduciary safe harbor for selection of a lifetime income provider;
  • modifying the treatment of custodial accounts on termination of 403(b) plans;
  • extending the current required minimum distribution requirements to age 72 (effective for individuals turning 70½ after Dec. 31, 2019);
  • requiring disclosures regarding lifetime income (12 months after guidance from the Labor Department is published); and
  • modifying the nondiscrimination rules to protect longer-service participants.

H.R. 1994 now moves to the Senate, where similar legislation – the Retirement Enhancement and Savings Act (RESA) – is pending before the Senate Finance Committee. As we noted previously, Finance Committee chairman Sen. Charles Grassley (R-IA) has indicated that he’s ready to act on the legislation in short order so that the House and Senate bills can be reconciled and sent to the president.  

Both bills authorize open MEP arrangements, significantly increase the incentives for a small business owner to adopt a new plan by enhancing the small employer pension plan start-up tax credit, and encourage small business owners to design a plan with an automatic enrollment feature.

In fact, the Finance Committee Chairman, along with the Committee’s Ranking Democrat, both issued statements praising the House passage of the SECURE Act.

“The SECURE Act, which passed today in the House of Representatives and includes my Retirement Enhancement and Savings Act, takes an important step forward to help encourage and facilitate retirement savings. This legislation is an example of bipartisan cooperation to solve issues on behalf of Americans. I appreciate the hard work of my colleagues in the House and look forward to its quick passage in the Senate,” Grassley stated

Similarly, Sen. Ron Wyden (D-OR) stated that, “The House-passed legislation is very similar to the Senate bill and I’m working with Chairman Grassley to get legislation signed into law as soon as possible.” 

Congress is now on recess for the Memorial Day holiday and will be returning the week of June 3. Given Chairman Grassley's and Ranking Member Wyden's statements, there's a strong possibility the Finance Committee will consider the legislation soon after returning from the holiday. 

The legislative text of the SECURE Act as reported in the House is online here, and the House Ways & Means Committee report on the SECURE Act is here (note that this does not incorporate the manager’s amendment that made changes to the Section 529 expansion and addressed the so-called kiddie tax). 


All comments
Jim Phillips
2 months 4 weeks ago
Kudos to Brian and others at NAPA and ARA for their relentless advocacy for this important piece of legislation. Really nice to see such a broad cross section of House Members join together in the fight against poverty in old age.