House Committee Approves Bill Aimed at Increasing Retirement Plan Coverage
Among other things, the RISE Act would encourage retirement savings by allowing plan sponsors to offer small financial incentives to motivate employee participation.
The U.S. House Committee on Education and Labor has voted unanimously to advance legislation introduced earlier this month that would improve access to retirement plans for employees and ease plan administrative burdens for employers.
The Retirement Improvement and Savings Enhancement (RISE) Act (H.R. 5891) was introduced by Committee Chairman Bobby Scott, D-Virginia, with support from Representatives Virginia Foxx, R-North Carolina; Mark DeSaulnier, D-California; and Rick Allen, R-Georgia.
The RISE Act includes provisions that have been introduced in separate pieces of legislation, including the Securing a Strong Retirement Act, often referred to as “SECURE 2.0,” a reference to 2019’s Setting Every Community Up for Retirement Enhancement (SECURE) Act. SECURE 2.0 was passed unanimously by the House Ways and Means Committee in May.
According to a fact sheet about the RISE Act, the bill would:
- Establish an online, searchable “Retirement Lost and Found” database at the Department of Labor (DOL) to help workers locate their retirement savings as they move from job to job;
- Allow 403(b) retirement plans to participate in multiple employer plans (MEPs) and pooled employer plans (PEPs);
- Ensure more part-time workers are offered opportunities to join retirement savings plans;
- Clarify rules regarding the recovery of inadvertent overpayments to retirees, minimizing hardships;
- Enable employers to provide small financial incentives, such as low-dollar gift cards, to incentivize workers’ participation in retirement plans; and
- Simplify and clarify reporting and disclosure requirements related to retirement plans.
“I am proud to support this bipartisan measure to modernize our nation’s retirement laws. Everyone wants the opportunity to retire with peace of mind and the RISE Act will help many more Americans do just that. By cutting red tape, this legislation provides more incentives for employers to offer retirement accounts and for employees to participate in saving for their future,” Allen said in a press release.
In a letter provided to the bill’s sponsors, the ERISA [Employee Retirement Income Security Act] Industry Committee (ERIC) said it recognized the legislation as a critical next step in building on the SECURE Act and promoting the retirement security of workers and retirees. ERIC said it is particularly encouraged by several provisions of the bill, including an increase in the cap for transferring former employees’ retirement plan funds to an individual retirement account (IRA) to $7,000 from $5,000.
“The introduction of the Retirement Improvement and Savings Enhancement Act is an important building block for passing the next bipartisan retirement package and expanding retirement savings opportunities for Americans,” said Andy Banducci, senior vice president of retirement and compensation at ERIC. “ERIC supports legislation that eliminates outdated and unnecessary administrative burdens, allowing large employers, like ERIC member companies, to put as many resources toward their retirement benefits offerings as possible.”
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