House Committee Unanimously Passes Bill to Upgrade 401(k) Plans Amid ‘Retirement Income Crisis’

A key House committee this past Tuesday passed a bill intended to increase the flexibility of 401(k) plans and improve access to the accounts. The bill, known as the Secure Act, had a Republican and Democrat backing it from the tax-writing Ways and Means committee, and was passed unanimously.

The bill has a significant chance of passing the heavily divided Congress. It contains elements that have support from both industry groups and advocacy organizations. Committee Chairman Richard Neal (D-Mass.) called the bill “a major bipartisan accomplishment” on Tuesday. The bill would be the first major legislative action to affect retirement since the Pension Protection Act of 2006.

The bill will allow small businesses to band together to offer 401(k)s and creates a new tax credit of up to $500 for companies that set up plans with automatic enrollment. It also repeals the maximum age for IRA contributions and raises the age for required mandatory distributions from 70 1/2 to 72. It would also expand the use of 529s, from only college-related expenses to include private schools, home schools and student loans.

See Ylan Muai, House Committee Unanimously Passes Bill to Upgrade 401(k) Plans Amid ‘Retirement Income Crisis’, MSN, April 2, 2019.