Ways and Means Brushes Past Talk of Secure 2.0 Annuity Provisions
The only H.R. 2954 annuity provision mentioned involves variable annuity fund menus.
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.
Neal referred to the ETF provision in his opening remarks.
“We’ve included Mr. Suozzi’s legislation to direct the Treasury Department to issue regulations addressing a glitch with respect of insurance-dedicated exchange-traded funds,” Neal said.
Suozzi used most of his own speaking time at the markup to praise Neal, Brady and other Ways and Means committee members and aides.
“I think the American people are hungry for us to do things together to solve problems,” Suozzi said. “They’re desperate for it. We all hear all the time about how discouraged people are about the partisan infighting. I want to work with all of my colleagues to let people know that we are getting this done on a bipartisan basis.”
About 10,000 baby boomers are becoming senior citizens every day, Suozzi added.
“We have a big storm coming in our country, with people with their long-term retirement and long-term care issues,” he said. “This legislation is going to make a big difference for a lot of people.”
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