House passes SECURE retirement bill with overwhelming bipartisan support

On May 23, 2019, the U.S. House of Representatives overwhelmingly passed the Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019 (H.R. 1994), which is intended to provide greater incentives for employers and employees to participate in retirement plans.

The SECURE Act seeks to make certain modifications for employer-provided retirement plans, individual retirement accounts (IRAs) and other tax-favored savings accounts.

Some key provisions from the SECURE Act include:

• Multiple employer plans: Permits common interest employers to join a pooled arrangement that allows employers to collectively offer a plan to their employees.

• Combined annual reports for groups of plans: Requires the IRS and DOL to effectuate the filing of a consolidated Form 5500 for similar plans.

• Fiduciary safe harbor for selection of lifetime income: Provides fiduciaries an optional safe harbor when selecting insurers for a guaranteed retirement income contract, thereby protecting the fiduciary from liability for any losses that may result to the participant or beneficiary due to an insurer's inability to satisfy its financial obligations under the terms of the contract in the future.

• Auto-enrollment tax credit: Provides a new tax credit of up to $500 per year to small employers that automatically enroll employees.

• Repeal maximum age for IRA contributions: Repeals the prohibition on contributions to a traditional IRA by an individual who has reached age 70½.

• Portability of lifetime income options: Provides for portability of lifetime income options that permits plan participants to preserve their lifetime income investments and avoid surrender charges and fees.

• Small employer start-up credit increase: Increases the start-up credit for small employer retirement plans.