Washington, D.C.—U.S. Senators Susan Collins (R-ME) and Maggie Hassan (D-NH) announced that several provisions from the Retirement Security Act of 2019 they introduced earlier this year have been signed into law as part of the final Appropriations agreement.
“As the Chairman of the Senate Aging Committee, ensuring that more people are better prepared for retirement is one of my top priorities,” said Senator Collins. “The bipartisan provisions Senator Hassan and I authored would significantly improve the financial security of many Americans by reducing the cost and complexity of retirement plans, especially for small businesses, and encourage individuals to save more for retirement. ”
According to the non-partisan Center for Retirement Research, there is an estimated $7.7 trillion gap between the savings American households need to maintain their standard of living in retirement and what they actually have. A recent Gallup poll found that only 54 percent of working Americans believe that they will have enough money to live comfortably in retirement.
The provisions of the Retirement Security Act included in the appropriations agreement would address this issue by:
· Enabling more businesses to join multiple employer plans (MEPs) to offer retirement programs to their employees. The bill would allow businesses to share the administrative burden of a retirement plan, which helps lower costs, without requiring a connection, or “nexus,” between them.
· Making MEPs a more attractive option for small businesses. The bill would protect members of a MEP from losing their tax benefits if one employer in a MEP fails to meet the minimum criteria necessary for retirement plans to obtain tax benefits.
· Facilitating adoption of retirement plans. The bill would simplify certain safe harbor rules to provide greater flexibility while also improving employee protection.
· Helping more small employers offer retirement plans. The bill would increase the current tax credit for small employer plan startup costs and create a new credit to help with startup costs for new plans that include automatic enrollment.
The Retirement Security Act provisions in the appropriations agreement were included as part of the Setting Every Community Up for Retirement Enhancement (SECURE) Act.