podium with House of Rep seal on it and us flag behind U.S. House of Representatives seal on the podium of the media briefing room in the Capitol building. February 26, 2014. (Photo: Diego M. Radzinschi/THE NATIONAL LAW JOURNAL)

House Ways and Means Committee Chairman Richard Neal, D-Mass., and ranking member Kevin Brady, R-Texas, introduced bipartisan legislation Tuesday, the Securing a Strong Retirement Act of 2020, which would boost the required minimum distribution age from 72 to 75.

The legislation builds on the Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019.

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Under current law, generally, those aged 72 and older must take RMDs from employer-sponsored defined contribution plans and traditional IRAs.

Neal and Brady's bill would increase the age to 75, and would be effective for distributions required to be made after Dec. 31, 2020, with respect to individuals who turn 72 after that date.

"Increasing the age for required minimum distributions will allow Americans to keep more of their savings in retirement plans for a longer period of time," the bill states.

The bill also exempts individuals with account balances of $100,000 or less on the last day of the year from the RMD rule. The provision would apply to distributions required to be made in calendar years beginning more than 120 days after the date of enactment.

"COVID-19 has only exacerbated our nation's existing retirement crisis, further compromising Americans' long-term financial security," Neal said in a statement.

"In addition to meeting workers' and families' most pressing, immediate needs, we must also take steps to ensure their wellbeing further down the road. With the Securing a Strong Retirement Act, Ranking Member Brady and I build on the landmark provisions in the SECURE Act and enable more workers to begin saving earlier — and saving more — for their futures."

Added Brady: "Our legislation will make it easier for folks to save, protect Americans' retirement accounts, and give workers more peace of mind as they plan for the future."

Other provisions of the bill, available here, include the following:

  • Allow 403(b) plans to be eligible to be structured as collective investment trusts. The provision would be effective for amounts invested after Dec. 31, 2020.
  • Allow individuals to pay down a student loan instead of contributing to a 401(k) plan and still receive an employer match in their retirement plan;
  • Index to inflation the catch-up contribution limit to IRAs for those aged 50 and over. The provision would be effective for taxable years beginning after 2021.
  • Remove required minimum distribution barriers for life annuities. Annuities would be allowed to satisfy the required minimum distribution rules if they increase by up to 5% per year; consist of a lump-sum payment in satisfaction of future annuity payments using reasonable assumptions as determined in good faith by the issuer or accelerates the receipt of annuity payments to be received in the following 12 months; provide dividends or similar amounts; or a death payment equal to the amounts paid for the annuity contract less prior payments.
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Melanie Waddell

Melanie is senior editor and Washington bureau chief of ThinkAdvisor. Her ThinkAdvisor coverage zeros in on how politics, policy, legislation and regulations affect the investment advisory space. Melanie’s coverage has been cited in various lawmakers’ reports, letters and bills, and in the Labor Department’s fiduciary rule in 2024. In 2019, Melanie received an Honorable Mention, Range of Work by a Single Author award from @Folio. Melanie joined Investment Advisor magazine as New York bureau chief in 2000. She has been a columnist since 2002. She started her career in Washington in 1994, covering financial issues at American Banker. Since 1997, Melanie has been covering investment-related issues, holding senior editorial positions at American Banker publications in both Washington and New York. Briefly, she was content chief for Internet Capital Group’s EFinancialWorld in New York and wrote freelance articles for Institutional Investor. Melanie holds a bachelor’s degree in English from Towson University. She interned at The Baltimore Sun and its suburban edition.