Finance Committee plans hearing on retirement legislation
The Senate Finance Committee announced this week that it will hold a hearing on July 28 to consider what Congress can do to advance bipartisan retirement security legislation.
Witnesses announced as of press time include Aliya Robinson of the ERISA Industry Committee, Brian H. Graff of the American Retirement Association, David Certner of AARP, and Oregon State Treasurer Tobias Read.
Building on the SECURE Act
Congress approved a significant bipartisan retirement security measure – the Setting Every Community Up for Retirement Enhancement (SECURE) Act – in 2019. (The SECURE Act was signed into law as part of the Further Consolidated Appropriations Act, 2020. For details, see Tax News & Views, Vol. 20, No. 42, Dec. 19, 2019.) Since then, the idea of building on those protections in a so-called SECURE Act 2.0 package has been broadly popular in both chambers.
Ahead of the hearing, Wyden and several of his Senate Democratic colleagues this week unveiled legislation aimed at boosting retirement savings among low- and moderate-income individuals. The Encouraging Americans to Save Act (text, section-by-section summary) would replace the current-law saver’s credit with a 50 percent government match on contributions of up to $2,000 per year made to 401(k)-type plans and IRAs by individuals with income up to $32,500 and couples with income up to $65,000. The amount of the match would phase out over the next $10,000 of income for individuals and $20,000 for couples.
The proposal also would create a coronavirus recovery bonus credit – an additional 50 percent credit on the first $10,000 in retirement savings made during a five-year period beginning in 2023 – for a maximum additional credit of up to $5,000. This bonus credit would phase out based on the same rules as the proposed matching payment.
Across the Capitol, the House Ways and Means Committee on May 5 approved a proposal expanding the SECURE Act that was offered by Chairman Richard Neal, D-Mass., and ranking member Kevin Brady, R-Texas. For prior coverage, see Tax News & Views, Vol. 22, No. 24, May 7, 2021.) That measure has not yet been taken up by the full House of Representatives.
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