Under the Protecting America’s Savings Act from Representatives Rob Portman (R-Ohio) and Benjamin Cardin (D- Maryland), retirement investors wouldn’t have to start taking plan payments until age 75, compared to the current 70 ½ . The bill also excludes $300,000 from RMD requirement .
The bills provisions address many of the issues that have arisen in recent months with a wave of corporate accounting standards in which the retirement savings of thousands of Americans were wiped out by their employer’s fiscal collapse.
“We must do a better job of enabling and encouraging all Americans to save for retirement,” Cardin said in a statement. “We must also face the realities of modern life – namely that more people are working, and they are living and working longer. The key is to provide Americans with the necessary tools to exert greater control over their retirement savings.”
New Bill’s Provisions
The Portman-Cardin bill’s other provisions include:
- accelerating workplace retirement plan contribution amounts
- allowing catch-up contributions for federal employees
- the provision of greater protections for employees who may be affected by mismanaged or fraudulently operated companies: It would impose a 50% excise tax on “golden parachute” payments to executives when a company goes bankrupt, and it would direct the Secretary of the Treasury to study and report to Congress on new ways to protect savings in defined contribution plans.
- allowing non-spousal beneficiaries to roll over inherited retirement plan savings into an IRA and withdraw money as an annuity. Currently, only surviving spouses may use a rollover in this manner. It also would allow individuals to rollover or transfer retirement plan assets to a spouse’s retirement plan or IRA during their lifetime.
- expanding and making permanent tax credits for lower-income savers
- accelerating IRA retirement plan catch-up contributions
- the elimination of IRA marriage penalties
- allowing additional employer contributions to SIMPLE plans
- accelerating income eligibility for deductible IRAs
- allowing periodic payment reductions without penalty.
Cardin and Portman’s Comprehensive Retirement Security and Pension Reform Act, HR 10, was enacted into law last year, making it easier to establish private pension plans.