Over the past couple of years, the retirement plan industry saw the introduction of legislation that would be what is considered the biggest overhaul of the industry since passage of the Pension Protection Act in 2006.
Eventually dubbed the Setting Every Community Up for Retirement (SECURE) Act, it seemed at first the overhaul would become a reality quickly as the House passed the legislation soon after committee review. However, a stall in the Senate made many speculate whether the act would pass by years-end.
Its eventual passage hastily occurred last week, with legislators including most provisions in the budget bill President Trump signed December 20, in order to avoid another government shutdown. Now the industry is abuzz with what the legislation means for plan sponsors in 2020 (more about that later) and beyond.
“The bill will make it easier for employers to provide both their full and part-time employees with the opportunities to save with workplace retirement plans, says Paul Richman, IRI chief government and political affairs officer. It’s going to make retirement plans more available to American workers through their open MEPs provision, which can create 700,000 new retirement accounts through that provision alone.”
The retirement industry will find some answers in the news coverage below:
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. Read more.
SECURE Act Progress Raises Enforcement Timeline Questions
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. Read more.
SECURE Act Passed By Full Congress
Passage of the SECURE Act is being hailed as a major accomplishment that will allow Congress to turn to other important retirement issues next year. Read more.
How the SECURE Act Will Impact 403(b) Plans
Sponsors can distribute assets from a 403(b)(7) custodial account, along with other measures. Read more.
Why Americans Need the SECURE Act
The president and chief operating officer of Nationwide Financial makes a case for how passage of the SECURE Act will improve Americans’ retirement security. Read more.
How Open MEPs Could Change the Retirement Plan MarketNot 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. Read more.
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