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Retirement, Mega Roth Provisions Dropped from Reconciliation Bill


Lawmakers have continued to strip elements from the Build Back Better Act—and a series of sweeping retirement-related provisions have now all been axed.

While most of the news coverage on what was originally cast as a $3.5 trillion reconciliation bill has concentrated on a host of progressive initiatives, a number of key retirement related provisions were also under consideration—until last night. Those included a requirement that most employers (with more than 6 workers, operating for a couple of years) begin automatically enrolling their employees in IRAs or 401(k)-type plans, as well as:

  • the establishment of a new type of Section 401(k) deferral-only arrangement;
  • an increase in credit limitation for small employer pension plan startup costs, including for automatic contribution arrangements;
  • a credit for certain small employer automatic retirement arrangements;  
  • modification of the Saver’s Credit by turning it into a government-based matching contribution and making it refundable; and
  • clarifying the deadline to contribute to an IRA with a tax refund.

Also dropped from the bill were a series of provisions designed to close the so-called “back door” Roth IRA, impose contribution limits on higher-income individuals with large account balances, and prohibit IRA investments conditioned on the account holder’s status.  

“Although we are disappointed the retirement plan coverage expansion provisions were dropped, we appreciate that they complied with our suggestion to drop all retirement provisions from the bill,” commented ARA CEO Brian Graff. “No one wants to eat vegetables without any dessert.”