Retirement Savings Plans,For Plan Sponsors,Custom

The Road to Pension Reform Gains Momentum

May 29, 2021

Senators Cardin and Portman reintroduce the Retirement Security and Savings Act

As we previously reported, on May 5, the House Committee on Ways and Means advanced the bipartisan “Securing a Strong Retirement Act of 2021”. On May 21, Senator Ben Cardin (D-MD) and Rob Portman (R-OH) reintroduced companion legislation, the Retirement Security and Savings Act of 2021 (“RSSA”), in the Senate.  MissionSquare Retirement has played an active role in supporting both bills.

Although not identical, the House and Senate bills share many common features impacting governmental and nonprofit employers and employees, including:

  • Eliminates the 457(b) “first day of the month” requirement
  • Modifies Required Minimum Distribution (RMD) rules
    • Increases starting age
    • Reduces excise tax for RMD failures
    • Removes RMD barriers for certain types of annuities
  • Allows matching contributions in a 401(k), 403(b), or 457(b) plan for student loan repayments
  • Allows 403(b) plans to invest in Collective Investment Trusts
  • Modifies catch-up contributions rules
  • Expands the age 50 “qualified public safety employees” exemption to private sector firefighters.

The Path Forward

It is expected that the Senate Finance Committee, where Senators Cardin and Portman are members, may hold a retirement hearing as early as this summer and may mark-up a retirement bill in the fall. This positions the House and Senate for a full vote later this year, although differences between the two bills will need to be resolved in conference. Absent action in 2021, it is still possible the bills could be acted on in 2022.

Historically, comprehensive pension legislation is enacted as a part of broader legislative packages. As we saw with the passage of the SECURE Act in 2019, even with strong bipartisan support, it can be a long process before a bill is enacted into law.

MissionSquare Retirement will continue to advocate for and closely monitor relevant pension reform legislation in support of enhancing retirement security for those who serve their communities. We will provide regular updates on developments as they occur. Please contact your MissionSquare Retirement Representative if you have questions.

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