Congress has sent President Donald Trump a 5,593 coronavirus relief and federal spending package.
The president must sign the bill containing the package, an alternative version, or a temporary government funding bill by Dec. 28, or much of the federal government will suspend operations.
- A collection of documents related to the House vote on version of the Consolidated Appropriations Act, 2021, package that the House Rules Committee took up is available here.
- The 5,593-page PDF file that contains the health agent and broker compensation disclosure provision, on page 4,475, is available here.
- A general article about the spending package is available here.
Lawmakers have used the text of the Consolidated Appropriations Act, 2021 (CAA 2021) package as a vehicle for ferrying many pieces of legislation not directly related to the COVID-19 pandemic or the federal budget through Congress.
Congress has approved the package and sent it to President Donald Trump. The president can choose whether to sign the bill containing the package or veto it. If the president decides to veto the bill, Congress could overturn the veto, send the president a revised bill, or face the prospects that parts of the government could suspend operations after Dec. 28.
The package contains large sections relating to unemployment insurance, health insurance and even horse racing. You may wonder: Is there something in there for financial professionals who help clients with retirement income planning?
Here are five things for annuity sellers to know about the CAA 2021 package.
1. The package does not appear to include the text of the “Securing a Strong Retirement Act of 2020″ bill.
House Ways and Means Committee Chairman Richard Neal, D-Mass., and Rep. Kevin Brady, R-Texas, the highest ranking Republican on the committee, introduced the “Securing a Strong Retirement Act of 2020″ bill, which is sometimes called the “Secure Act 2.0″ bill, in October.
The bill could do things like increase the required minimum distribution (RMD) age to 75, from 72 for employer-sponsored retirement plan account assets and traditional individual retirement account assets.
The version of the CCA 2021 package on the House website was clearly put together quickly and it’s possible that the official text will be different from what’s currently there. But what’s on the House website now does not include the Secure Act 2.0 text.
2. A FAFSA Simplification section mentions annuities.
The FAFSA Simplification — Division EE, Title VII — would change the rules for college students who are filling out the Free Application for Federal Student Aid (FAFSA) form. This form determines how much money a family has available to pay for college, and how much aid a student will get.
Section 478(d), which relates to the amount of retirement assets a family can exclude from aid calculations, talks about a method for calculating the value of the family’s assets. This is done by determining the present value cost of an annuity that would provide a supplemental income, at age 65, “equal to the difference between the moderate family income (as most recently determined by the Bureau of Labor Statistics), and the current average Social Security retirement benefits,” according to the text.
The rate of return of the annuity in the calculations is presumed to be 6%, and the sales commission on an annuity is presumed to be 6%.