The Senate Finance Committee advanced a retirement legislation package Wednesday, setting the stage for a final push to make it law by the end of the year.
The Enhancing American Retirement Now (EARN) Act, which the committee reported favorably by a vote of 28-0, has several provisions similar to the House’s retirement package (H.R. 2954), including a provision that would allow employers to treat workers’ student loan repayments the same as 401(k) contributions.
The House passed its retirement bill in March by a 414-5 vote. Last week, the Senate Health, Education, Labor and Pensions Committee advanced legislation (S. 4353) that would improve retirement coverage for part-time workers and facilitate access to workplace emergency savings accounts.
The push will now begin to combine elements of the three bills and hold floor votes in the Senate and the House on the entire package. Lawmakers have said that they aim to send the final package to President Joe Biden by the end of the year.
The Finance Agenda
The EARN Act would also increase the minimum age by which workers must begin drawing down on their retirement savings to 75 from 72 and extend pooled plan designs to nonprofit 403(b) plans.
Like the House bill, the EARN Act would also create a lost-and-found retirement plan database to help reconnect workers with misplaced or forgotten retirement benefits from past jobs.
Senate Finance Chairman
The HELP committee’s bill would allow employers to use retirement plan assets to pay off incidental plan design expenses, such as automatic enrollment—a key plank of the House bill.
The Finance Committee bill would also raise limits on mandatory retirement plan cash-out distributions to $7,000 from $5,000. It would facilitate the inclusion of side-car emergency savings accounts to retirement plans, letting workers save up to $2,500, pre-tax and penalty-free.
The retirement bill, popularly known as Secure 2.0, is seen as a sequel to the broad retirement overhaul bill that was signed into law in 2019.
“It’s all designed to facilitate saving for your retirement and that is a very good thing,” Sen.