In recent weeks a number of new, relatively narrow retirement savings plan proposals have emerged. Among them is a provision in the INVEST Act, H.R.3383, which NAIFA supports. Among other provisions, the INVEST Act would amend securities law to allow 403(b) plan participants to choose to invest in collective investment trusts (CITs) and separate account insurance products. The necessary tax law changes were made in SECURE 2.0. The House approved the bill on December 11. See details in story above.
A new bill (H.R.6324), introduced November 28 by Reps. Jimmy Panetta (D-CA) and Darin LaHood (R-IL), would create a new in-service rollover option that would allow individuals over the age of 50 to move some of their existing retirement savings from a 401(k) (or similar) plan into an annuity, while continuing to contribute to their 401(k) plan. The purpose behind the measure is to encourage guaranteed lifetime income. The Retirement Simplification and Clarity Act would also simplify 402(f) notices to do a better job of explaining their options to people who are requesting distributions from their retirement plans. NAIFA has endorsed this bill.
Another new bill, S.3333/H.R.6417, would increase the annual contribution people can make to their pension-linked emergency savings accounts (PLESAs) from $2,500 to $5,000. Introduced on December 3 by Sens. Cory Booker (D-NJ) and Todd Young (R-IN) in the Senate and by Reps. G.T. Thompson (R-PA) and Eugene Vindman (D-VA) in the House, the Emergency Savings Enhancement Act is aimed at helping individuals save for emergencies without having to tap their retirement savings. The bill would expand PLESA eligibility to include all the employer’s workers who qualify to participate in the employer-sponsored retirement savings plan.
On November 20, Rep. Lloyd Doggett (D-TX) introduced legislation, H.R.6183, that its author says will protect consumers. Rep. Doggett said that his bill, the HSA Consumer Protection Act, will prevent HSAs from being used as a tax shelter by the wealthy by imposing income limits on the payroll tax exemption for HSA contributions, limiting the window for reimbursement for qualified expenses to two years, requiring individuals to substantiate that their HSA withdrawals are for qualified medical expenses, limiting fees to be sure that the institutions offering HSAs cannot collect excessive fees, limiting the exception that allows penalty-free withdrawals for non-qualified health expenses from HSAs as of age 65, and creating anti-abuse rules to prevent use of HSA money for non-medical purposes.
There was also legislation introduced (H.R.6084) that would change litigation rules to prevent frivolous ERISA-related lawsuits. The ERISA Litigation Reform Act was introduced by Rep. Randy Fine (R-FL).
Prospects: It is likely that many, if not all, of these bills will be considered for inclusion in the next generation retirement savings bill (SECURE 3.0), on which relevant tax and pension writers are currently working. However, there is little possibility of enactment of any of these bills prior to next year.
NAIFA Staff Contact: Jayne Fitzgerald – Director – Government Relations, at jfitzgerald@naifa.org