Key Senate Committee Releases Draft of Retirement Policy Changes 

A “discussion draft” of broad, bipartisan retirement legislation released last week by the Senate Health, Education, Labor and Pensions (HELP) Committee marks a major step in Congress’ drive to pass a sweeping reform package before the end of the year. Led by Chair Patty Murray, D-WA, and ranking Republican member Richard Burr, R-NC, the HELP Committee oversees ERISA issues in the Senate.

On May 26, the HELP Committee released the Retirement Improvement and Savings Enhancement to Supplement Healthy Investments for the Nest Egg (RISE and SHINE) Act. The Committee is soliciting comments on the draft bill and is expected to consider and vote on the measure later this month.

The RISE & SHINE Act is the HELP Committee’s version of a new round of retirement reforms building on the Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019. The package joins a list of similar bills commonly referred to as “SECURE 2.0,” including House-passed legislation as well as another Senate bill also set to see action this month at the Finance Committee, which has jurisdiction over tax issues.

Very generally, these wide-ranging SECURE 2.0 bills aim to expand retirement plan coverage, boost savings, increase lifetime income opportunities, and ease plan administration. Mercer is broadly supportive of the legislation and continues to advocate for further improvements as Congress attempts to pass a final bill.

Provisions in the draft RISE & SHINE Act not included in other SECURE 2.0 bills to date would:

• Allow employers to offer emergency savings accounts linked to defined contribution (DC) plans
• Enhance disclosures when defined benefit pension plan sponsors offer participants a lump sum option to replace their annuity payments
• Promote automatic re-enrollment in DC plans
• Encourage development of pooled employer plans
• Ease annual reporting for certain groups of small DC plans
• Permit DC plan sponsors to consolidate certain required participant notices
• Allow some incidental plan design expenses to be paid from plan assets

The Senate HELP and Finance committees are already working together and with House lawmakers on outlining a consensus SECURE 2.0 package that could be brought for a vote during the lame-duck congressional session later this year. We’ll continue to keep you posted as this important legislation moves forward.