On March 29, 2022, the U.S. House of Representatives approved the Securing a Strong Retirement Act of 2022 (also known as SECURE Act 2.0 since it builds on the Setting Every Community Up for Retirement Enhancement [SECURE] Act of 2019), by an overwhelming vote of 414 to 5. Goals of the Act include expanding coverage, increasing retirement savings, and simplifying and clarifying retirement plan rules. It is anticipated that the Senate will pass some version of SECURE Act 2.0.
If passed by the Senate as currently drafted, the bill would impact retirement plans and plan administration by:
- requiring employers with 401(k), 403(b) and SIMPLE plans to automatically enroll eligible participants but allow those eligible to opt out of coverage,
- enhancing the retirement plan start-up credit to help small businesses to sponsor a retirement plan,
- increasing the required minimum distribution age from 72 to 75,
- increasing the catch-up contribution limit for participants, and
- allowing employers to match their student loan repayments made by employees with retirement account contributions.
Both Republican and Democratic members of the U.S. Senate immediately praised the House’s passing of SECURE Act 2.0 which is a strong indication the Senate is on board and enactment of the legislation should be coming soon.