Lawmakers will convene an executive session to mark up the RISE & SHINE Act on June 14, according to a spokesman from the Senate Committee on Health, Education, Labor and Pensions.
Comment letters from retirement security organizations—including the ERISA Industry Committee, Insured Retirement Institute, Pension Rights Center and U.S. Chamber of Commerce—broadly support the bipartisan retirement legislation from Senators Patty Murray, D-Washington, and Richard Burr, R-North Carolina, the chairwoman and ranking member, respectively, of the Senate HELP Committee.
The wide-ranging Retirement Improvement and Savings Enhancement to Supplement Healthy Investments for the Nest Egg—aka RISE & SHINE—Act includes provisions for defined benefit and defined contribution plans. Lawmakers designed the bill to bolster emergency savings, increase access to retirement plans and provide additional information and transparency to help workers manage their finances.
The RISE & SHINE Act subsumed an emergency savings bill proposed by Senators Cory Booker, D-New Jersey, and Todd Young, R-Indiana. The bill also builds on and incorporates legislation passed in the House of Representatives such as the Securing a Strong Retirement Act of 2021, called SECURE 2.0; the Retirement Improvement and Savings Act, called the RISE Act; and the Retirement Security and Savings Act.
IRI’s comment letter ticks off each previous legislative effort included in RISE & SHINE that the retirement security advocate supports.
“IRI supports a number of provisions in the draft language that align with the association’s 2022 Federal Retirement Security Blueprint, such as expanding eligibility of pooled employer plans to non-profit organizations using 403(b) retirement plans and allowing employers to offer emergency savings programs to workers,” the letter states.
The letter also reaffirms that the organization supports the Lifetime Income for Employees Act, termed the LIFE Act, as well as the RISE Act and SECURE 2.0.
ERIC, IRI and Pension Rights Center have all voiced concerns that the discussion draft left out the lost-and-found retirement plan registry overseen by the Department of Labor.
“While ERIC supports the draft of the RISE & SHINE Act, we have provided suggestions to the HELP Committee to help further strengthen the proposal,” says Andrew Banducci, senior vice president of Retirement and Compensation Policy at ERIC. “For example, the bill would be improved by making disclosure requirements less complex and adding a lost-and-found registry for plan participants to find former employers so that they can receive their benefits. We’re looking forward to continuing to work with HELP leaders and other policymakers to improve the retirement system.”
Further comments on the draft legislation provisions address Section 303 of the RISE & SHINE Act, which incorporates the Information Needed for Financial Options Risks Mitigation Act, termed the INFORM Act. Section 303 would require pension plan sponsors to provide plan participants and retirees with what it terms the “critical information” needed to fully consider an employer’s offer of a lump-sum payment option in place of a lifetime annuity option.
The ERIC letter argues that the section would be improved by modifying the 90-day advance notice to reference the start date of the annuity rather than the participant’s election, and recommends that plan sponsors be required to disclose whether the plan’s lump sum would be “reasonably likely” to replicate the stream of payments by purchasing a commercial annuity.
“Because annuity prices could vary daily and retail products may not include identical features, this disclosure should provide greater flexibility by eliminating the ‘reasonably likely’ statement and replacing it with a statement that the lump sum could be used to purchase a commercial annuity, but that the annuity may have a different value and features than benefits under the plan,” the letter states.
In its letter, the U.S. Chamber of Commerce criticizes lawmakers for including INFORM Act provisions in Section 303. Chantel Sheaks, vice president for retirement policy at the Chamber, writes that such provisions are not necessary.
“We believe this requirement is unnecessary because plans currently provide explanations to participants before offering a lump sum window,” Sheaks writes. “Instead of requiring disclosure, Congress should instead look at the reasons that plans are offering such windows, such as reducing their substantial PBGC premium liability.”
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