The SECURE Act has been billed as the most significant piece of retirement legislation since passage of the Pension Protection Act in 2006. (Photo: Shutterstock)
The roadblocks to passing the Setting Every Community Up for Retirement Enhancement Act in the Senate by unanimous consent are leaving industry proponents of the bill hopeful it can be tacked onto must-pass spending bills this fall.
After influential GOP Senators Ted Cruz, R-TX, and Pat Toomey, R-PA, placed holds on the bill earlier this summer, hopes had turned to an agreement that would raise the debt ceiling.
The deal brokered between the White House and Congressional leaders this week, which increases discretionary spending by $320 billion over the next two years, did not include any add-on legislation.
Cruz objected to the fast tracking the SECURE Act by a unanimous consent vote after it passed the House of Representatives by a near unanimous vote in May. The “hold” he placed on the process was in reaction to a provision stripped in the House version of the bill at the 11th hour that would have allowed assets in 529 savings to pay for homeschooling, and middle and high school private education costs.
Toomey has publicly objected to a provision added to the bill in the House that would expedite tax relief for military Gold Star Families who have lost family members in the line of duty. Toomey has said that bill should be passed as a stand-alone measure to assure its quick passage.
Now, the bill's supporters are looking to the upcoming appropriations season to see the SECURE Act through.
“The likely alternative to get the bill across the finish line is to attach it to a must-pass spending vehicle in the fall,” said Will Hansen, chief government affairs office for the American Retirement Association.
The SECURE Act has been billed as the most significant piece of retirement legislation since passage of the Pension Protection Act in 2006.
The bill includes relaxed regulation of Open Multiple Employer Plans, designed to allow small employers to pool employees under one 401(k) plan, and new tax incentives for small businesses to sponsor stand-alone retirement plans.
It also includes a long-anticipated annuity selection safe harbor for sponsors of defined contribution retirement plans, the extension of the required minimum distribution age for qualified retirement plans, and the removal of the age cap on contributions to traditional IRAs.
It is mostly paid for by eliminating some allowances on so-called stretch IRAs, a provision that has received widely reported criticism by the Wall Street Journal's editorial board.
The Senate is scheduled to begin its August recess next week. Hansen said few are holding out hope that holds on the bill will be lifted by then.
That will leave the fate of the SECURE Act to the upcoming annual appropriations process. Both chambers of Congress are scheduled to advance 12 separate spending bills by the end of the fiscal year, or the last day of September.
“The SECURE Act could be attached to any of the 12 bills,” explained Hansen. “The holds on the bill would not have to be lifted—the spending bills would have to be voted on. For the most part the spending bills pass no matter what.”
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Nick Thornton
Nick Thornton is a financial writer covering retirement and health care issues for BenefitsPRO and ALM Media. He greatly enjoys learning from the vast minds in the legal, academic, advisory and money management communities when covering the retirement space. He's also written on international marketing trends, financial institution risk management, defense and energy issues, the restaurant industry in New York City, surfing, cigars, rum, travel, and fishing. When not writing, he's pushing into some land or water.
