IRI PUSHES BACK AGAINST SECURE ACT CRITICS

Posted on July 18, 2019

Calls for Immediate Senate Consideration

WASHINGTON, D.C. – The Insured Retirement Institute (IRI) is fighting back against recent editorial criticism of comprehensive federal retirement security that will help millions more American workers better prepare for retirement.

IRI is the leading national trade association representing the retirement income industry.

In an editorial today, The Wall Street Journal criticized a provision in the SECURE Act to require certain beneficiaries of unspent IRA accounts to take distributions within 10 years. This was included as a fiscally responsible measure to pay for provisions which will increase access to employer-provided retirement plans enabling the establishment of 700,000 new retirement savings accounts.

The SECURE Act, which passed the House 417-3 but is awaiting Senate action, is the most expansive retirement legislation in a decade and would make it easier for small businesses to pool together to offer workers a retirement plan. It also would expand access to lifetime income products within workplace retirement plans and require plans to provide workers with an illustration of how much monthly income their account would provide. IRI strongly supports the legislation.

IRI responded to the criticism noting that Congress designed IRA’s to deliver retirement income to the account owner, not serve as an estate planning tool.

“IRAs are retirement accounts that enable people to save for their golden years and then use the funds as income,” said Wayne Chopus, IRI president and CEO. 

Currently, if a retiree passes before the funds are spent, the remaining funds can be passed to named beneficiaries, who can then withdraw from the accounts over their life expectancies.

The SECURE Act provides a number of logical exemptions to the 10-year rule for an account owner’s surviving spouse and for a surviving child until the age of 18.

“Most IRAs will likely be used by the original retirement account owner as income – exactly how Congress intended when the IRA was established -- not as estate planning tools,” Chopus said.

Chopus added that the delay in Senate action is delaying help to address a retirement crisis where too few Americans are saving sufficiently for retirement.

“This legislation is a good, strong measure that will deliver significant, needed benefits to American workers,” Chopus said. “We know that overwhelming bipartisan majorities support this legislation we do not need unnecessary distractions from newspaper editors while Americans face a retirement crisis. The time for waiting is over and the Senate should pass this bill now.”

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Contact: Dan Zielinski