LEGISLATION
The 117 th Congress
After all of the challenging issues the 116 th Congress , and indeed , the world faced last year , coupled with the many challenges still ahead , it would be foolhardy to try to predict what legislation the 117 th Congress might tackle in 2021 .
Knowing COVID-19 recovery and economic recovery will be at the top of the agenda , the very slim majorities in the House and the Senate suggest areas with broad bipartisan support will have the best chance for activity and enactment . Retirement is near the top of the list , and that could be good news for financial professionals and the families and businesses they work with .
Retirement is complex legislatively , involving both tax and ERISA , with jurisdiction held by several committees . Lots of excellent ideas are being discussed , including new and expanded tax credits for employers starting plans , increasing the Required Minimum Distribution ( RMD ) age to 75 , allowing employer-matching to retirement plans of student loan payments , catch-up contribution limit increases , and expanding the Saver ’ s Credit .
Judi Carsrud brings decades of industry experience to her position as Assistant Vice President of Federal Relations for NAIFA . Her primary advocacy areas include tax and ERISA issues relative to insurance industry products and retirement savings plans . jcarsrud @ naifa . org .
With its likelihood of garnering bi-partisan support and with the slim majorities in the House and Senate , retirement has a good chance for some activity in the 117 th Congress .
44 Perspectives Q1 2021
The SECURE Act
The SECURE Act ’ s modifications to multiple employer plans take effect at the beginning of this year , which will make it easier for businesses to move to a defined contribution type of retirement plan .
These plans essentially provide employers with relief from much of the fiduciary responsibility , which is usually a hurdle in deciding to implement them . But they also allow full contributions , employer matching and the ability to include auto-enrollment and autoescalation features to further improve overall retirement readiness of many Americans .
Time is right for a review
What this means for financial professionals is that 2021 is the right time to have discussions with clients and prospects about retirement objectives , review their current savings plan if they have one and be ready to take advantage of any actions Congress takes to make it easier for employers to sponsor plans and for participants to save adequately .
NAIFA and NAILBA will be working with the House Ways and Means and Education and Labor committees and with the Senate Finance and Health , Education , Labor and Pensions ( HELP ) committees to help enact legislation that simplifies retirement rules and makes it easier for financial professionals to help their clients plan and save for retirement .
State efforts
State advocacy will also likely focus on retirement , where there are efforts for states to create their own “ state-sponsored ” plans , which mandate that employers provide payroll deduction for auto-IRA type savings .
NAIFA and NAILBA , joining with the retirement-provider industry , do not support statemandated , auto-IRA programs because they are far less robust than private-sector retirement plans . They result in less participation by workers , smaller overall savings and more likelihood of lackluster enthusiasm by employers and employees .
Our experience is that when employees see the results of their savings matched by their employers , they become enthusiastic and are committed to long- term planning and savings .
Though 2021 is poised to be a challenging year , we are ready to use our expertise and influence to help improve the level of retirement readiness for the millions of consumers our members serve .