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By 
September 09, 2021 at 06:51 PM
What You Need to Know
- The bill applies to employers that have been in existence for at least two years.
- Businesses that employ five or more people would be required to automatically enroll employees in IRAs or 401(k)-type plans.
- The bill is now headed to the House Budget Committee.
The House Ways and Means Committee passed by a 22-20 vote late Thursday Rep. Richard Neal’s auto-IRA bill.
The legislation, which is now headed to the House Budget Committee, requires employers that have been in existence for at least two years, do not sponsor a retirement plan, and employ five or more people to automatically enroll those employees in IRAs or 401(k)-type plans. After enrolled, workers could decline to participate or drop out at any time.
To offset administrative costs, employers would receive a tax credit, Neal, the committee’s chairman, said.
Neal is marking up Thursday and Friday legislative proposals under the budget reconciliation instructions.
Neal’s bill also makes the Saver’s Credit refundable.
“Current law includes a nonrefundable tax credit — called the Saver’s Credit — for eligible taxpayers who make elective deferrals to tax-favored retirement plans or contributions to IRAs,” the Massachusetts Democrat said.
