Chairman Neal Opening Statement at Committee Markup of Views and Estimates Letter and Bill to Strengthen Retirement Security
Washington, DC, May 5, 2021
(As prepared for delivery)
As members of the committee are aware, retirement security has been one of my priorities as the Chairman of the Ways & Means Committee. Too many workers in this nation reach retirement age without the savings they need. In fact, according to the Center for Retirement Research at Boston College, 50 percent of households are “at risk” of not having enough to maintain their living standards in retirement.
The retirement crisis in America is real and will only worsen unless we make saving easier and do more to encourage workers to begin planning for retirement earlier.
Last Congress, this Committee had great success in working together to enact the SECURE Act, the most significant retirement legislation to become law in over a decade. Thanks to that legislation, 4 million more Americans now have the opportunity to save at work and an estimated 600,000 to 700,000 new retirement accounts will be formed.
But more work needs to be done. And that’s why I’m pleased that Ranking Member Brady and I have come together to develop H.R. 2954, the Securing a Strong Retirement Act of 2021, or SECURE Act 2.0.
Building on the successes of the SECURE Act, H.R. 2954 will expand automatic enrollment in 401(k) plans by requiring 401(k), 403(b) and SIMPLE plans to automatically enroll participants in the plans upon becoming eligible, with the ability for employees to opt out of coverage.
Expansion of automatic enrollment will significantly increase participation in retirement savings. Since first defined and approved by Treasury in 1998, automatic enrollment has boosted participation by eligible employees generally, and particularly for Black, Latino, and lower-wage employees. And tellingly, an early study found that adoption of auto-enrollment increased participation in a 401(k) plan by short-tenure Latino employees from 19% to 75%.
In addition to expanding coverage and increasing retirement savings, SECURE 2.0 makes a number of simplifications and clarifications of the retirement plan rules. All of these changes will make it easier for American families to prepare for a financially secure retirement.
Again, I’m happy that we were able to work together on a bipartisan basis to develop this important legislation. Our efforts have resulted in an excellent product that will help Americans plan for their golden years and it has broad support from outside stakeholders from AARP to Edward Jones to the American Red Cross.
With that, I will recognize Ranking Member Brady for the purpose of an opening statement…
Our next order of business is H.R. 2954, the SECURE Act 2.0. This bill will expand coverage and increase retirement savings and make a number of simplifications and clarifications of the retirement plan rules.
I am really proud of the bipartisan work we have done here to help Americans prepare for a financially secure retirement.
The Ranking Member and I, along with our very talented staff, have worked together for months to craft this legislation. In addition, many of our members have made very meaningful contributions to this package.
We’ve included Mr. Davis’ legislation ensuring that workers with student loans don’t miss out on 401(k) matching contributions and Representative Murphy’s legislation to increase the required minimum distribution age to 75.
We created a higher catch-up contribution amount for those years just before retirement, a provision particularly important for pilots who have a mandatory retirement age and a priority of Representatives Sanchez and Pascrell.
We’ve also included a number of Representative Kind’s bills. For example, the SECURE Act 2.0 provides that a 403(b) plan may be established and maintained as a multiple employer plan. Representative Kind’s legislation fixing a problem with the start-up credit and multiple employer plans also is included making it easier for small businesses to take advantage of the credit.
SECURE Act 2.0 also includes Representative Chu’s legislation that would direct the Internal Revenue Service to promote the Saver’s Credit to increase utilization of this important incentive for savings, which ia also a priority for Representative Sewell.
We’ve included Representative Panetta’s legislation that provides that 403(b) custodial accounts are permitted to invest in collective investment trusts – and his legislation reforming the family attribution rules. And we’ve included Representative Sewell’s legislation to reduce by one year the period of service requirement for long-term, part-time workers to participate in 401(k) plans. This provision is particularly important for women who tend to work part-time more frequently than men. And we’ve included Mr. Suozzi’s legislation to direct Treasury to issue regulations addressing a glitch with respect to insurance-dedicated exchange-traded funds.
We’ve also included Representative Beyer’s legislation that’s important to the charitable community and would, among other things, index for inflation the annual IRA charitable distribution limit.
The bill also includes Representative Moore’s legislation that would provide penalty-free withdrawals from retirement plans for individuals in case of domestic abuse.
We have also included Representative Evans’ legislation directing the Labor Department to update its disclosure rules to allow better comparisons amongst investments to aid participant decision-making. And finally, we’ve included Representative Pascrell’s legislation that would allow first responders to exclude service-connected disability pension payments from their gross income after they reach retirement age.
As is apparent from this extensive list – and I know that Ranking Member Brady also has a sizable list from his side of the aisle - this package represents the hard work of many of our members.
The SECURE Act was the most significant retirement legislation to become law in over a decade. Let’s not wait another decade to enact the important provisions in the SECURE Act 2.0. Today’s bill goes a long way in addressing this country’s retirement crisis. I urge all of my colleagues to support this much needed legislation.
I now recognize Ranking Member Brady for the purposes of an opening statement.