In May of 2019, the U.S. House of Representatives passed, by a near unanimous vote (417 – 3), the “Setting Every Community up for Retirement Enhancement Act” (The “SECURE Act”). With such strong support in the House, it was believed that this bill had an excellent chance of becoming law this year. However, as the end of the current legislative session approaches, the chances of passage are fading. Passage is contingent on U.S. Senate action. The President has indicated he will sign this bill if it passes in the Senate.
Little floor time is left this year and Senate majority leader Mitch McConnell wants most of this devoted to judicial nominations.
At this point, the best chance for passage this year is through “unanimous consent.” This happens when all Senators support a bill. It can then be voted on without any floor time.
Three Senators are preventing this from happening. Ted Cruz has concerns about the 529 provisions (allowing 529 funds to be used for home-schooling expenses) while Mike Lee and Pat Toomey have issues with certain technical changes to the Internal Revenue Code unrelated to retirement plans. These concerns are minor and resolvable hopefully allowing passage of the bill.
Some of the notable provisions of this bill are:
Allowing unrelated employers to sponsor “pooled employer plans” (“PEPs”) (previously referred to as “open multiple employer plans”)
Requirement of an annual notice to plan participants disclosing the estimated monthly annuity income their account balance could generate at retirement.
A safe harbor for plan fiduciaries when selecting an annuity provider for a plan.
Removal of the age limit for traditional IRAs currently at 70 ½ and pushing back to 72, the age at which plan participants and IRA holders require distributions.
Flexibility for treatment of in-plan guaranteed lifetime income vehicles.
Access to qualified plan deferral programs for part-time employees.
