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May 24, 2019 at 12:32 PM
Life and annuity groups are celebrating the possibility that they might be able to get H.R. 1994 — a modest package of retirement savings changes — all the way through Congress, and onto the desk of President Donald Trump.
Partisanship slowed progress early Thursday. Some Republicans tried to keep the current version of the Setting Every Community Up for Retirement Enhancement Act (Secure Act) bill from coming up for a vote on the House floor. A motion to send H.R. 1994 back to congressional committees for more work failed by a fairly close, 200-222 vote.
Republican House members voted 188-12 to send the bill back to the committees.
(Related: House Passes Secure Act Retirement Bill)
But Democrats voted 220-2 to go ahead with consideration of the bill.
Once the bill actually came up for formal debate, the bill received overwhelming support. House members passed the bill by a 417-3 vote. The only lawmakers who voted against the bill were Rep. Justin Amash, R-Mich.; Rep. Thomas Massie, R-Ky.; and Rep. Chip Roy, R-Texas.
H.R. 1994
For consumers, the most noticeable provision may be one that would increase the required minimum distribution age to 72, from 70 1/2 today.
For employers, the key provisions may be ones that would help small employers join together to offer retirement plans, and that would increase the retirement plan auto-enrollment safe harbor cap to 15% of the participant’s pay, from 10% today.
For insurers, the key provision may be out that would create a safe harbor, or buffer against some lawsuits, for an employer that chooses a specific company to provide a lifetime income option, or annuitization option, for the plan participants.
The “Fiduciary Safe Harbor for Selection of Lifetime Income Provider” provision in Section 204 of the version of the bill that the House passed would apply to an employer that used a careful approach to pick a good annuitization option provider. The sponsor would not have a responsibility “for any losses that may result to the participant or beneficiary due to an insurer’s inability to satisfy its financial obligations under the contract,” according to the bill text.
An early provision, Section 203, would set pension benefit income statement lifetime income disclosure rules. If an employer provided a lifetime income forecast created using procedures required by federal regulators, along with standardized warnings provided by the Treasury secretary, an employer would not have any liability associated with the lifetime income stream forecast, according to the bill text.
Reactions
The most important reactions to House passage of H.R. 1994 came from Senate Finance Committee Chairman Charles Grassley, an Iowa Republican, and Sen. Ron Wyden, D-Ore., the highest ranking Democrat on the committee: Both are celebrating passage of the bill.
Open bipartisan support for the bill in the Senate dramatically increases the odds the bill will get through the Senate, at a time when hostility between Republicans and Democrats is stalling passage of many other bills.
Here’s a look at some of what life, annuity and benefits organizations are saying.
American Council of Life Insurers
ACLI President Susan Neely said in a statement that House passage of the Secure Act bill is a sign that policymakers are moving past talk on retirement security to action, and that there will be momentum for Senate passage of the Senate version of the bill, the Retirement Enhancement and Savings Act bill, or RESA.
The Secure Act bill and the RESA bill would “make it easier for employers to offer workplace retirement plans with annuities that guarantee an income for life,” Neely said.
National Association of Insurance and Financial Advisors
NAIFA Chief Executive Officer Kevin Mayeux said in his statement that the Secure Act bill passed with overwhelming bipartisan support,.
