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House Ways & Means Committee Markup of Retirement Legislation

House Ways & Means Committee

Markup

Wednesday, May 5, 2021

Bills Considered

Opening Statements

Chairman Richard Neal (D-Mass.)

In his opening statement, Neal noted that retirement security has a been one of his priorities as chairman, but his history of working on this issue goes back to his earliest days on the committee. He said that too many workers reach retirement without the savings they need, and too many households are at risk of not having enough to maintain their living standards. He highlighted that this bill builds on the success of the SECURE Act and will expand automatic enrollment, increase participation in retirement savings, and simplify current rules to make it easier for families to plan for a financially secure retirement. He noted that the bill is bipartisan and has broad support from stakeholders.

Ranking Member Kevin Brady (R-Texas)

In his opening statement, Brady noted the bipartisan nature of the markup and noted the opportunity to build on the success of the SECURE Act to help Americans save at all stages of their careers. Brady highlighted that the bill would ease burdens on small businesses that want to offer retirement plans to their workers as well as help those closer to retirement age catch up on savings to take control of their financial futures. Brady also highlighted provisions in the bill that would promote retirement saving via automatic enrollment, allow employers to match student loan payments with retirement plan contributions, and offset startup costs for new plans.

Views and Estimates Letter to the Committee on the Budget

The committee’s budget views and estimates for fiscal year 2022 were favorably transmitted to the House Committee on the Budget via a voice vote.

H.R. 2954, the “Securing a Strong Retirement Act of 2021“

Neal introduced his legislation and his Amendment in the Nature of a Substitute, which would expand coverage and increase retirement savings, as well as make a number of simplifications and clarifications of retirement plan rules. Neal noted the bipartisan nature of the bill, saying that many members of the committee made meaningful contributions. He highlighted a number of specific provisions, including that the bill allows employers to make retirement contributions for workers paying of student loan debt, increases the required minimum distribution (RMD) age to 75, creates a higher catch-up contribution limit for savers nearing retirement age, directs the Internal Revenue Service (IRS) to promote the saver’s credit, allows 403(b) plans to invest in collective investment trusts (CITs), and reduces the length of service requirement for part-time workers to participate in a workplace retirement plan, among other provisions. He noted the committee received 81 letters of support from stakeholders and urged his colleagues on the committee to support the legislation.

Brady said the legislation is important for workers, families, small businesses and retirees. He noted that the bill will not only help individuals save for retirement and help retirees manage their retirement better, but will also allow Main Street businesses to attract employees by offering better retirement benefits. He highlighted a number of provisions including that the bill raises the amount late career workers can save for retirement, supports employees paying down student loans debt by allowing employers to match payments with contribution to a retirement plan, helps military spouses via a tax credit for small employers that make military spouses eligible for plan benefits, provides greater flexibility by raising the RMD age and reducing the penalty for failure to take an RMD, expands options for contributing to charity, and clarifies rules for withdrawals related to new or adopted children. Brady said the legislation will allow Americans to build their savings and have greater control over their financial futures.

Thomas Barthold, Joint Committee on Taxation, briefly discussed changes made to the legislation via the Amendment in the Nature of a Substitute, noting that most were clerical in nature, and provided staff revenue analysis of the bill. He highlighted provisions that had notable budgetary effects, particularly noting that the legislation would substantially increase the number of opportunities for Roth contributions to retirement plans.

Committee members who spoke in favor of the legislation included Reps. Mike Thompson (D-Calif.), Devin Nunes (R-Calif.), John Larson (D-Conn.), Vern Buchanan (R-Fla.), Ron Kind (D-Wis.), Jason Smith (R-Mo.), Adrian Smith (R-Nebr.), Bill Pascrell (D-N.J.), Mike Kelly (R-Pa.), Danny Davis (D-Ill.), Tom Rice (R-S.C.), Earl Blumenauer (D-Ore.), David Schweikert (R-Ariz.), Brian Higgins (D-N.Y.), Jackie Walorski (R-Ind.), Terri Sewell (D-Ala.), Darin LaHood (R-Ill.), Judy Chu (D-Calif.), Brad Wenstrup (R-Ohio), Gwen Moore (D-Wis.), Jodey Arrington (R-Texas), Donald Beyer (D-Va.), Drew Ferguson (R-Ga.), Dwight Evans (D-Pa.), Ron Estes (R-Kan.), Thomas Suozzi (D-N.Y.), Lloyd Smucker (R-Pa.), Jimmy Panetta (D-Calif.), Kevin Hern (R-Okla.), Jimmy Gomez (D-Calif.), and Carol Miller (R-W.V.).

Members raised their support for specific provisions throughout the markup. Davis, LaHood, Thompson, Sewell, Chu, Wenstrup, Moore, Arrington, Estes and Gomez highlighted the importance of the provision that would allow employers to treat employees’ student loan payments as elective deferrals and make contributions to their retirement accounts. Davis noted that millennials struggling with student loan debt are particularly limited in their ability to save for retirement.

Sewell, Moore and Gomez spoke in favor of expanded automatic enrollment provisions, and Pascrell noted the incentives for businesses to offer retirement plans included in the bill. Buchanan, Moore and Estes highlighted the importance of the provision that raises the RMD age. Particularly noting workers, such as airline pilots, that have mandatory retirement ages, Pascrell, Ferguson and Smucker voiced their support for language in the bill that will increase the catch-up contribution limit for savers aged 62-64. Wenstrup noted his support for the provision in the bill that expands access for military spouses.

LaHood and Panetta spoke in favor of the provision that will allow 403(b) plans to invest in CITs; both noted that it is important to ensure public sector and non-profit retirement savings programs have the same access to low-cost investments as private sector plans.

Several committee members including Kind, Jason Smith, Blumenauer, Moore and Higgins spoke in favor of expanding Employee Stock Ownership Plans (ESOPs). Neal said he has been a long-time supporter of ESOP legislation and that he would work with committee members to “get it over the finish line.”

The Amendment in the Nature of a Substitute was agreed to and the amended bill was reported favorably to the House by a voice vote.

For more information on this markup, please click here.