In a resounding show of bipartisan support, the U.S. House of Representatives passed this morning the Setting Every Community Up for Retirement Enhancement (SECURE) Act, or HR 1994, by a vote of 417-3. The bill takes a multi-faceted approach to promoting employer-based retirement programs by allowing small employers to band together and create multiple employer plans (MEPs); encouraging auto-enrollment; giving long-time, part-time workers the ability to contribute to a 401(k); and ensuring the portability of lifetime investment products.
The SECURE Act requires plan sponsors to give workers who contribute to an MEP an estimate of their projected future income—much like what Social Security provides. The bill increases the minimum age for required distributions (from 70.5 to 72) and the maximum age at which an employee can contribute to his/her traditional IRA (also from age 70.5 to age 72).
HR 1994 does not, however, include a controversial provision that would have allowed people to use 529 Plans to help fund K-12 tuition, including costs associated with home schooling. As passed by the House, the SECURE Act prohibits 529s from financing K-12 expenses.
The bill now heads to the Senate, where it needs to be rectified with a proposed (and also popular and bipartisan) Retirement Enhancement and Savings Act (RESA) being considered by the Senate Judiciary Committee.