Biden Plan Drops Retirement Changes, Leaves Backdoor Roths Intact

While President Joe Biden’s Build Back Better framework, released Wednesday, excluded the retirement planning provisions that were approved in the House Ways and Means Committee’s Build Back Better bill, retirement industry advocates plan to prod lawmakers to pass Secure Act 2.0.

On May 5, the House Ways and Means Committee passed the Secure Act 2.0, known officially as the Securing a Strong Retirement Act of 2021. The bill raises the required minimum distribution age from 72 to 75, expands automatic enrollment in retirement plans and enhances 403(b) plans, among other provisions.

Paul Richman, chief government and political affairs officer at the Insured Retirement Institute, told ThinkAdvisor Friday in an email that IRI is “disappointed to learn that the Build Back Better framework had dropped the automatic contribution plans and arrangements provision.”

IRI believes “that it was good public policy that held the promise of addressing the insecurity and anxiety millions of America’s workers, retirees, and their families feel about retirement,” Richman said. “It would have created millions of new retirement savers and trillions of dollars in new retirement savings, especially for lower- and middle-income workers and fit well with the goals and objectives of the overall Build Back Better agenda.”

That said, IRI is “hopeful and optimistic that Congress will continue to seek ways to address our nation’s retirement insecurity, build economic equity, strengthen financial security, and provide the means for workers to create sustainable lifetime income to last throughout their retirement years by now turning its attention to the package of retirement savings bills, known as the Secure 2.0. We’re going to be focusing our attention now on Secure 2.0 and trying to move that forward.”

Proposals in the House Ways and Means Committee’s Build Back Better bill that were dropped from Biden’s new framework include: