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May 06, 2021 at 10:23 AM
What You Need to Know
- Ways and Means Committee members approved the bill by a voice vote.
- One high-profile provision could increase the required minimum distribution age to 75.
- Some lawmakers mentioned the RMD increase in passing.
House Ways and Means Committee members seem to be unanimous in their support for, or acceptance of, the annuity provisions in H.R. 2954.
The committee marked up H.R. 2954, the Securing a Strong Retirement Act of 2021 (Secure 2.0) bill, Wednesday and approved it by a voice vote.
Ways and Means Chairman Richard Neal, D-Mass., and Rep. Kevin Brady, R-Texas, the highest ranking Republican on the committee, introduced the bill Monday. Supporters are describing the bill as a sequel to the legislation that created the Secure Act.
The RMD Increase Provision
One provision that’s been getting attention, Section 105, would increase the age when people have to begin taking distributions from IRAs and other retirement plans, such as 401(k) plans and 403(b) plans, to 75, from 72 today.
Neal and Brady both mentioned the required minimum distribution (RMD) age increase provision in their opening marks. Rep. Gwen Moore, D-Wis., and Rep. Ron Estes, R-Kan., also mentioned the RMD increase their marks.
No members criticized or debated the RMD increase provision.
Title II — Preservation of Income
H.R. 2954 drafters put three annuity provisions in Title II in the current draft of the bill.
- Section 201 would tweak the RMD rules in a way that would help retirement savers use income annuities with benefits increase features, such as return-of-premium death benefits, inside IRAs and defined contribution retirement plans.
- Section 202 would let retirement savers put more of their assets in qualifying longevity annuity contracts (QLACs), or deferred income annuities.
- Section 203 would help life insurers add exchange-traded funds (ETFs) to variable annuity fund menus, by eliminating conflicts built into the current rules.
The ETF provision, Section 203, was the only one of the three annuity provisions mentioned at the markup. Rep. Thomas Suozzi, D-N.Y., proposed the ETF provision.
