The SECURE Act Passes the House- Provisions Advisors Need to KnowSubmitted by GRP Advisor Alliance on June 4th, 2019
The SECURE Act Passes the House- Provisions Advisors Need to Know
The U.S. House of Representatives passed the SECURE Act (Setting Every Community Up for Retirement Enhancement Act) on May 23, 2019. This legislation makes significant, positive changes to the laws related to retirement savings accounts.
Among other provisions, The SECURE Act:
- Increases small employer access to retirement plans
- Increases required minimum distribution ages, by delaying RMDs to age 72
- Removes the age limitation (70.5) on IRA contributions
- Gives a $500 tax credit to smaller employers to encourage automatic enrollment into their retirement plan
- Provides increased access to annuities inside of retirement plans so that more employees can have a source of guaranteed lifetime income. Today, many plan sponsors do not offer annuities due to concerns about liability in choosing a carrier, even though many Americans are looking for guaranteed income in retirement beyond Social Security. A safe harbor provision will alleviate this concern, providing more opportunities for annuities to be offered inside of retirement plans. GRPAA will work with our insurance partners to create annuities structured for retirement plans.
The Senate has a similar bill called the Retirement Enhancement Securities Act (RESA), which mostly mirrors the SECURE Act. After RESA passes in the Senate, both the House and Senate will then meet to hammer out all the issues and create a bill to be passed by both houses and the President.