Apr 04, 2019 - 4:00pm

The SECURE Act: A Way Forward on Retirement Security


Executive Director, Retirement Policy

On April 2, 2019, the House Ways and Means Committee favorably reported out H.R. 1994, the Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019. The SECURE Act is a compilation of recent retirement legislation from both sides of the aisle, and there is a lot for plan sponsors and participants to be happy about in it. 

An amendment from Reps. Vern Buchanan (R-Fla.) and Ron Kind (D-Wis.) added provisions allowing for open multiple employer plans (MEPs) that will allow unrelated businesses to band together to offer a retirement plan to their workers. Rep. Kind noted that these amendments potentially could provide coverage for an additional 700,000 individuals. This step will go a long way towards closing the retirement coverage gap, while maintaining important federal protections for participants under the Employee Retirement Income Security Act. 

The Buchanan/Kind amendments also removed the “one bad apple” rule that Treasury had imposed on MEPS. This rule condemns all employers in a MEP to the equivalent of plan qualification jail if one employer does not meet the myriad requirements under the Internal Revenue Code. This no-nonsense solution will provide employers participating in a MEP the security of knowing that one bad action by someone else will not jeopardize their employees.

The SECURE Act also does a lot to help plan sponsors with furthering their employees’ retirement goals, such as:

  • increasing the 10 percent cap to 15 for the auto-enrollment safe harbor;
  • simplifying the 401(k) safe harbor;
  • allowing for trust-to-trust distributions of lifetime income products;
  • increasing the required minimum distribution age from 70 & ½ to 72;
  • providing a fiduciary safe harbor for selection of a lifetime income provider;
  • providing small employer startup and auto enrollment credits;
  • allowing consolidated Form 5500s for certain DC plans; and
  • easing the nondiscrimination rules for closed plans to protect the benefits of older workers with longer service.

This is a long list, and we applaud the efforts that went into getting there. The U.S. Chamber of Commerce is dedicating to helping to make this list a reality.

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About the Author

Executive Director, Retirement Policy