Improving retirement security has become a top priority for Congress in 2019, according to various press accounts. Advocates are watching three bills – the SECURE Act, the Butch Lewis Act and the Retirement Savings and Security Act – all of which have some level of bipartisan support.
The House of Representatives passed the Secure Act in May by over 400 votes and the Butch Lewis Act on July 24 by a vote of 264 to 169. Yet, both bills face uncertain futures in the Senate when lawmakers return from their summer recess on September 9. Below are brief summaries of each bill and their prospects for passage.
The Setting Every Community Up for Retirement Enhancement (or SECURE) Act would implement the most comprehensive changes to private retirement plans in more than a decade. Among its many reforms, age restrictions that currently prevent workers over age 70½ from contributing to traditional IRAs would be repealed; part-time workers would have an easier time contributing to 401(k) plans; and a new $500 tax credit would be created for small businesses to offset the start-up costs of adding a 401(k) or SIMPLE IRA plan for employees. Despite its overwhelming popularity in the House, a recent article by financial journalist Nick Thornton reported that Senators Ted Cruz (R-TX) and Pat Toomey (R-PA) have placed “holds” over non-retirement language contained in the bill that places its future in doubt.
Butch Lewis Act
The Rehabilitation for Multiemployer Pensions Act of 2019 would establish the Pension Rehabilitation Administration (PRA) within the Department of the Treasury to protect the benefits union retirees have earned. Of the nearly 10 million people nationwide covered by union-sponsored multi-employer plans, about 1.3 million of them are in plans that are quickly running out of money. The PRA would provide low-interest loans and other assistance to troubled multi-employer pension plans to help them stay solvent. The legislation is named for Butch Lewis, an Ohio truck driver and member of the Teamsters Central States Pension Plan who fought to protect retirees’ benefits before succumbing to a stroke in December 2015. According to the financial web site, Chief Investment Officer, the bill faces stiff opposition from Republicans over its projected costs – estimated at $64.4 billion by the Congressional Budget Office – and that it doesn’t provide long-term fixes. Sen. Sherrod Brown (D-OH), who introduced the Senate version of the bill, noted it will need amendments to garner support from both Democrats and Republicans.
Retirement Savings and Security Act
Introduced in May by Senators Rob Portman (R-OH) and Ben Cardin (D-MD), the Retirement Security and Savings Act builds on many of the reforms contained in the Secure Act. The bill features more than 50 provisions aimed at improving coverage with small employers and among part-time workers. “This legislation includes sweeping reforms to help Americans save more for retirement by allowing people who have saved too little to set more aside for their retirement, helping small businesses offer 401(k)s and other retirement plans, expanding access to retirement savings plans for low-income Americans without coverage and providing more certainty and flexibility during Americans’ retirement years,” Senator Portman said in a statement. By most press accounts, the bill’s future will be determined when, and if, Congress passes the Secure Act.