Important changes to the design of 401(k) and similar defined contribution retirement plans are again moving forward in Congress. On March 29, the House overwhelmingly approved the bipartisan Securing a Strong Retirement Act by a vote of 414 to 5.
The bill, dubbed "SECURE Act 2.0," builds on the Setting Every Community Up for Retirement Enhancement (SECURE) Act, signed into law in December 2019 to improve retirement savings opportunities for workers.
"By expanding automatic enrollment in employer provided retirement plans, simplifying rules for small businesses and helping those near retirement save more for longer, this legislation will help increase Americans' access to retirement funds and help families save for the future," said House Majority Leader Steny Hoyer (D-Md.).
The Senate is considering its own version of SECURE Act 2.0, the Retirement Security and Savings Act, which shares many similar provisions as the House bill. However, "as the Senate legislative process moves forward, lawmakers may try to incorporate other features proposed in separate House and Senate bills," according to HR consultancy Mercer.
If the Senate passes a SECURE Act 2.0 measure, both chambers would likely move to reconcile their separate versions.
Key retirement plan changes made by SECURE Act 2.0, as passed by the House, are highlighted below.
Mandatory Automatic Enrollment/Escalation
SECURE Act 2.0 would require employers that establish defined contribution plans to automatically enroll...
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