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Editor's Note
The U.S. House and Senate have passed a bipartisan appropriations package that will keep the federal government running through the next year. Folded into the sweeping legislation are virtually all of the provisions of the Setting Every Community Up for Retirement Security Act (SECURE Act). President Trump is expected to sign the bill by the end of tomorrow. In this special edition newsletter, PLANSPONSOR covers the SECURE Act’s most important provisions.
, Compliance
SECURE Act Contains Provisions Lawmakers Have Pushed for Years
The legislation would remove the automatic enrollment/escalation safe harbor cap,under Section 401(k) of the Code, require benefit statements provided to defined contribution plan participants to include a lifetime-income disclosure at least once during any 12-month period, create a new fiduciary safe harbor for selection of lifetime income providers, and modify the nondiscrimination rules with respect to closed defined benefit plans.
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Roles Will Change With Open MEPs
It will be some time before open multiple employer plans (MEPs) will be up and running, but when they are, there could be a change in mindset and role for retirement plan sponsors and providers.
How Open MEPs Could Change the Retirement Plan Market
Not immediately, but over time, with passage of open MEP legislation, plan sponsors will see a change in service delivery, plan advisers will have to consider different distribution paths, and plan providers will experience both innovation and disintermediation.
SECURE Act Aimed at Retirement Security for All
Among other provisions, the SECURE Act includes measures to require employers to allow long-term, part-time workers to participate in their workplace 401(k) plan, and a measure which would increase the current required minimum distribution (RMD) age limit to 72.
Some SECURE Act Provisions Will Take Time to Implement
The SECURE Act’s establishment of an in-plan annuity selection safe harbor and the development of open MEPs will take time to unfold—but perhaps not as much as some expect.
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