Proposed bill extends open MEPs to nonprofits
Bill includes provisions for reduced IRA penalites, S-Corp incentives.
Wisconsin’s Rep. Ron Kind introduced a bill in October that would increase access to retirement savings for people with 403(b) plans. The Savings for All Vocations Enhancement Act allows nonprofit organizations to use open multiple employer plans to offer retirement savings options for their employees.
The open MEP provisions of the SECURE Act did not apply to 403(b) plans.
“I am proud to introduce the bipartisan SAVE Act today to help more Americans better plan for retirement,” Kind said in a statement announcing the bill. “Too many Wisconsinites find saving for retirement to be out of reach and confusing, but these are common sense steps to make retirement savings as easy and understandable as possible for everyone, no matter what they do.”
Related: How much will SECURE Act, Open MEPs improve retirement security?
Over half of workers are behind when it comes to saving for retirement, according to a survey by John Hancock. As of the end of 2019, 403(b) plans held $1.1 trillion, about one-sixth of assets in 401(k) plans, the Investment Company Institute found.
In addition to opening the door to open MEPs, the bill would reduce tax penalties on IRAs, and create incentives for S-Corporations to convert to employee stock ownership plans.
“By facilitating more ESOPs in private industry, Congressman Kind’s legislation will allow even more Americans to build meaningful retirement savings and reap the benefits of employee-ownership,” said Stephanie Silverman, president and CEO of the Employee-owned S Corporations of America.
Kind is a Democrat. The bill is cosponsored by Republican Reps. Mike Kelly of Pennsylvania, and Jason Smith of Missouri.
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