IRI BRIEFS STATE LAWMAKERS ON FEDERAL RETIREMENT SECURITY LEGISLATION

Posted on August 9, 2019


NCSL Presentation - Federal SECURE Act

WASHINGTON, D.C. – The Insured Retirement Institute (IRI) briefed a state lawmaker task force today on the progress and content of critical federal retirement security legislation.

Paul Richman, IRI chief government affairs and political officer, told the National Conference of State Legislators (NCSL) Insurance Task Force that a looming U.S. retirement crisis requires a national response to ensure American workers have a financially sound and dignified retirement.

“Every day, 10,000 Americans retire and many of those people will need income that lasts 20 or 30 years and even longer,” Richman said. “Unfortunately, too many Americans have insufficient savings to last throughout their retirement years. IRI research shows that 45 percent of Baby Boomers have zero retirement savings. This is why we have and are continuing to work hard to convince Congress to expand retirement savings opportunities to millions more U.S. workers.”

Richman explained that Congress has advanced the most comprehensive retirement legislation in more than a decade – the Setting Every Community Up for Retirement Enhancement (SECURE) Act. The bipartisan measure overwhelmingly passed the U.S. House of Representatives in April by a vote of 417-3. It is currently stalled in the U.S. Senate.

“The SECURE Act is a compilation of common-sense measures to help Americans overcome the obstacles they now face in saving for their retirement,” Richman said.

The measure would expand and preserve opportunities to save for retirement; increase access to lifetime income products; help savers make more-informed decisions about their retirement finances; enhance features of workplace retirement plans; and address the increased risk of people outliving retirement assets due to longer lifespans.

More specifically, the SECURE Act will make it easier for small businesses to band together to offer their workers a retirement plan. It also extends access to employer-provided plans to long-serving part-time workers.

The measure increases the age at which consumers must withdraw money from their retirement accounts from 70 ½ to 72. This will allow Americans who may still be employed to continue to save.

The bill also eliminates the prohibition on contributions to an Individual Retirement Account (IRA) after age 70 ½. To help reduce the risk of retirees outliving their savings, the SECURE Act reduces barriers to offering lifetime income options like annuities in 401(k) and other defined contribution retirement plans. And, the bill provides for portability of those products if the employer decides to change record keepers.

Finally, the SECURE Act will provide retirement account holders with an illustration that estimates how much monthly income their savings will produce.

Despite the lack of Senate action to date, IRI remains optimistic the SECURE Act will be enacted into law this year.

“This legislation has been years in the making, enjoys overwhelming bipartisan support in both houses of Congress and the White House has indicated that the president will sign it,” Richman said. “We remain confident that the benefit of enhancing the retirement security for millions more American workers will overcome the extremely limited Senate opposition and we’ll see the SECURE Act enacted into law soon.”

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Contact: Dan Zielinski