Life insurance groups say they are happy to see the House Ways and Means Committee vote to endorse H.R. 6757 — a package of proposed Internal Revenue Code changes related to retirement savings and other forms of saving.
But the American Council of Life Insurers (ACLI) and the Insured Retirement Institute (IRI) say they want the House to pass more of the provisions included in another retirement savings bill, the Retirement Enhancement and Savings Act (RESA) bill.
(Related: House Panel Advances Tax Package)
House Ways and Means members voted 21-14 Thursday to support H.R. 6757 — the “Family Savings Act of 2018″ bill.
All Republicans who participated voted in favor of the bill. All Democrats who participated voted against it.
H.R. 6757 would:
- Make it easier two or more employers to join together to offer “multiple employer plans,” or MEPs.
- Add a lifetime income “portability” provision. If a retirement plan got rid of a lifetime income arrangement, it could use this provision to let the lifetime income arrangement users move the associated assets into another retirement savings arrangement.
- Ease the current required minimum distribution rules for older retirement plan users.
- Create a new type of savings account, the “universal savings account” (USA), that could be used to pay for any type of expense. An eligible individual would be able to contribute up to $2,500 to a USA each year without including the cash in taxable income.
The MEP provision and the lifetime income portability provision come from the RESA proposal, according to the ACLI.
The ACLI says it believes the version of H.R. 6757 that the House Ways and Means Committee approved leaves out two key RESA provisions.
One RESA provision left out would encourage retirement plan sponsors to add annuitization options, or arrangements that can convert part or all of a worker’s plan assets into a lifetime stream of retirement income.