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Lobbyists Expect Major Retirement Legislation to Pass in 2022

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What You Need to Know

  • There’s a push from leadership in the House and Senate to get Secure Act 2.0 passed this year.
  • House Ways and Means Chairman Neal and Rep. Kevin Brady want a retirement package passed this year.
  • A single retirement package will emerge and Congress will act on it later in the year, IRI predicts.

“This is the year” for retirement legislation, with passage of the Securing a Strong Retirement Act of 2021, or Secure Act 2.0, likely, Langston Emerson, a partner and policy strategist at Mindset DC, said Friday at the Investment Adviser Association’s compliance conference.

There’s a push from House and Senate leaders to get Secure Act 2.0 passed this year “simply because there are a few members, both on the Republican side and Democratic side, that are leaving Congress and this [bill] is a legacy item for them,” Emerson said.

That being said, “there are still some issues that need to be reconciled” between Republicans and Democrats in both the House and Senate, Emerson added. That, along with the war in Ukraine, makes timing of passage this year uncertain, he said.

Indeed, Neil Simon, vice president of government relations for the Investment Adviser Association, added on the panel with Emerson that House Ways and Means Committee Chairman Richard Neal, D-Mass., and Rep. Kevin Brady, R-Texas, the ranking minority member on the committee who is retiring, are committed to getting a retirement package passed this year.

Last May, the House Ways and Means Committee passed the Secure Act 2.0, which raises the required minimum distribution age from 72 to 75, expands automatic enrollment in retirement plans and enhances 403(b) plans, among other provisions.

The House Ways and Means Committee also passed last year H.R. 2954, the Securing a Strong Retirement Act, and the House Education and Labor Committee passed H.R. 5891, the Retirement Improvement and Savings Enhancement Act.

Similar bills, the Retirement Security and Savings Act, S. 1770, and the Improving Access to Retirement Savings Act, S.1703, were introduced in the Senate.

The Insured Retirement Institute expects these measures to advance in 2022.

Wayne Chopus, IRI’s president and CEO, said in releasing the annuity lobby group’s Retirement Security Blueprint, which details the association’s public policy agenda, that IRI is “optimistic that Congress will move bipartisan legislation this year. Elected leaders from both parties understand that retirement anxiety and insecurity is an issue for many people, and that drives a willingness to find and enact solutions.”

An IRI spokesman added in a separate email to ThinkAdvisor on Tuesday that IRI is optimistic that “a single retirement package will emerge … and that Congress will act on it later in the year. Still a ways to go, but we see significant bipartisan support and acknowledgement that additional retirement security measures are needed that build upon the Secure Act of 2019 so we are continuing to work to advance solutions.”

Both the Retirement Security and Savings Act and Secure Act 2.0 would direct the Treasury Department to amend its regulations to allow ETFs to be offered within variable insurance products.

Other priorities for IRI’s policy agenda, as set out in the Retirement Blueprint, include:

  • Passage of the Lifetime Income for Employees Act, H.R. 6746, which would allow plan sponsors to utilize annuities that provide a guaranteed return on investment and have a delayed liquidity feature as a default investment vehicle for a portion of contributions made by a retirement saver who has not made investment selections.
  • In the absence of voluntary action by the Securities and Exchange Commission, Congress should enact legislation such as the Registration for Index-Linked Annuities (RILA) Act, S. 3198/H.R. 4865, to direct the SEC to remove a barrier inhibiting the use of the products by developing a new registration form better suited for insurance products.
  • Enacting legislation, such as the E-SIGN Modernization Act, S.4159, to streamline how consumers receive electronic communications by removing outdated requirements while ensuring retirement savers can continue to choose how they want to receive and access their financial information.

(Image: Shutterstock)