Senate HELP Leaders Release SECURE 2.0 Counterpart

In an opening bid by the Senate, the chair and ranking Republican of the Senate Health, Education, Labor and Pensions Committee have released a discussion draft of legislation that builds off the House-passed SECURE Act 2.0 legislation. 

Sens. Patty Murray (D-WA) and Richard Burr (R-NC) on May 26 unveiled the “Retirement Improvement and Savings Enhancement to Supplement Healthy Investments for the Nest Egg” (RISE & SHINE) Act—legislation to bolster emergency savings and increase access to retirement plans, among other things. 

Murray and Burr note that they worked with their colleagues to develop the bipartisan retirement package following a Senate HELP Committee hearing held in late March that focused on improving retirement security and enhancing emergency savings. 

The package is intended to build off the Securing a Strong Retirement Act of 2021 (SECURE 2.0), which the House of Representatives passed in March,  as well as the Retirement Improvement and Savings Enhancement (RISE) Act introduced in the House and the Retirement Security & Savings Act introduced by Sens. Ben Cardin (D-MD) and Rob Portman (R-OH).

The RISE & SHINE Act includes a wide range of proposals that share similarities or are contained in the aforementioned bills, including:  

• allowing 403(b) plans to participate in multiple employer plans (MEPs) and pooled employer plans (PEPs);
• making various PEP clarifications, including that a named fiduciary is responsible for collecting contributions in a PEP;
• reducing the requirement for part-time workers to participate in an employer’s retirement savings plan from three years of service to two years;
• providing employers the option to offer pension-linked emergency savings accounts of up to $2,500;
• allowing employers to automatically reenroll every three years employees who previously opted out of the plan;
• updating dollar limit for mandatory distributions from $5,000 to $7,000;
• permitting incidental expenses incurred related to plan design, such as automatic enrollment and reenrollment or automatic escalation, to be charged to the plan;
• clarifying that plans filing under a Group of Plans need only to submit an audit opinion if they have 100 participants or more; and
• clarifying that, for purposes of cash balance plans, the interest crediting rate that is treated as in effect and as the projected interest crediting rate is a reasonable projection of such variable interest rate, subject to a maximum of 6% (this clarification will allow plan sponsors to provide larger pay credits for older, longer service workers).

“We need to put families back on solid financial footing and use the tools we know work to help people put more money in their savings and retirement accounts—which is why this bipartisan package is so important,” Murray said in a statement. “I look forward to continuing to work with Senator Burr and our colleagues to pass this package and improve the financial security of workers, retirees, and families across the country.”

“The recent historic inflation for everyday essentials, like groceries and gas, reinforces the importance of financial planning and saving,” added Burr. “That’s why I’m proud to work with my colleagues on this retirement package, which builds off of many bipartisan proposals to enhance Americans’ access to retirement plans, strengthen the ability of small businesses to offer plans to their employees, and improve overall savings for retirees’ golden years.”

The senators note that they plan to introduce and mark up final legislation in the coming weeks. They also request that feedback on the discussion draft be submitted via email by June 2 to: [email protected].  

Note also that this discussion draft should be viewed as the opening salvo by the Senate HELP Committee. The Senate Finance Committee, which has jurisdiction over the Internal Revenue Code, also plans to release and markup its version of SECURE 2.0 legislation in the coming weeks. 

A section-by-section summary of the legislation can be found here, and the full text of the RISE & SHINE Act discussion draft can be found here.