The House and Senate are both prioritizing retirement security this week.
House members passed the “Securing a Strong Retirement Act of 2022” bill on Tuesday, a comprehensive package of retirement-focused rules to improve Americans’ retirement security. The vote was 414-5. The Senate’s Health, Education, Labor and Pensions Committee (also known as HELP) also had a hearing on Tuesday to discuss retirement savings proposals that would benefit American workers and retirees.
These efforts could motivate small businesses to start their own retirement programs and encourage workers to build comfortable nest eggs.
“I think this is the year Congress will get this done and we will see substantive retirement reform that is passed into law,” said Lance Schoening, director of policy at financial firm Principal. Both chambers of Congress seem poised to move forward with legislative proposals that benefit American workers’ future retirements, he said.
Congress last passed retirement-specific legislation in December 2019 with the Secure Act, a sweeping bill that included provisions such as increasing the age for required minimum distributions and embracing more annuities in 401(k) plans. Although the law was a step in the right direction, Americans are still concerned about how comfortable they will be in retirement.
More than six in 10 people 25 years and older said they were anxious about having enough money to live on in retirement, and eight in 10 who were 45 and older who are not retired yet said they wished they had saved more for their retirements, according to an AARP survey of almost 1,000 registered voters 25 years and older in September. A stark majority – 92% – said elected officials should support legislation that bolsters retirement security through the workplace, a benefit not all Americans have at their jobs.
The House’s proposal, which some may refer to as the Secure Act 2.0, includes a multitude of provisions to enhance retirement for all Americans, including expanding automatic enrollment in retirement plans and improving the Saver’s credit. It includes increasing the age for required minimum distributions again and expanding features of 403(b) plans. The proposal also includes allowing employers to make matching contributions to workers’ retirement plans while their employees pay down student loans and increasing incentives to small businesses who start a retirement plan for their employees.
“Congress is hearing the concern out there to do more in this area,” said Paul Richman, chief government and political affairs officer at the Insured Retirement Institute. “The Secure Act was a big step forward and a long time coming.” The last time Congress had passed retirement legislation was 14 years before, he said.
The Senate has yet to introduce its own bill, though many of the provisions it has considered overlap with the House’s proposal. The Senate will likely introduce a legislative proposal of its own soon, and that something will be passed before the end of the year, Schoening said.
“What Congress has done here with the bills, like the one we see in the House and last year in the Senate that we expect reintroduced here soon, is a focus on where the system can be improved and enhanced,” Schoening said. “Congress is focused on improving where we see shortcomings.”