As the days on the U.S. Senate calendar tick away, industry groups are trying a last-ditch push to get its favored retirement-security bill a vote.
In a letter this week to Senate Majority Leader Mitch McConnell, R-Kent., Sen. Tim Scott, R-S.C., lobbied for immediate Senate consideration of the bipartisan Setting Every Community Up for Retirement Enhancement (Secure) Act. The bill passed the House by a 417-3 vote on May 23.
Since then it has languished in the upper chamber, where nothing happens until McConnell wants it to happen.
The American Council of Life Insurers are among industry trade groups leading the push for consideration of the bill, which it says will help 700,000 workers at small businesses save for retirement.
"The benefits of SECURE are too numerous to mention in full. But it expands access to retirement plans for millions of workers, including those employed by small businesses," wrote Susan Neely, ACLI president and CEO.
"It also allows older workers and retirees to contribute more to their IRAs, increases 401(k) coverage to part-time employees, and helps new parents, including adoptive parents, better manage expenses."
Among the many features of the act is an important change to Individual Retirement Accounts.
Notably, the SECURE Act proposes strict new limitations on an estate planning strategy referred to as the "stretch IRA." Essentially, a stretch IRA allows a person to pass on their IRA to a non-spouse beneficiary, without it immediately losing its tax-deferred status. Beneficiaries can withdraw assets from a stretch IRA very slowly, thereby maintaining protection for decades.
In other words, the IRA can be passed from generation to generation, all the while retaining its tax protection. Under the SECURE Act, beneficiaries would be required to withdraw all assets in a stretch IRA within ten years of the death of the benefactor.
Most of the SECURE changes are meant to create more retirement dollars for more people. All of this creates more clients for the financial services industry, while being a positive development for the worrisome "retirement crisis."
That is why industry groups like it as a "win-win" proposal. It is supported by groups as varied as the U.S. Chamber of Commerce, the Church Alliance, the International Association of Fire Chiefs, the Society for Human Resources Management, the Women’s Institute for a Secure Retirement and the Association for Advanced Life Underwriting.
“Holding back the SECURE Act delays retirement security for millions of Americans,” said Marc Cadin, president and CEO of AALU. “This bipartisan bill unlocks many tools that enhance the ability of families to secure their retirement. In addition, it protects millions of pensions and safeguards financial security for Gold Star families. The SECURE Act puts our country one step closer to closing the retirement savings gap, and we urge the Senate to act now.”
Other senators signing on to the McConnell letter included lawmakers from states with a big insurance and annuity presence, such as Sens Joni Ernst, R-Iowa, and Thom Tillis, R-N.C.
Still, with McConnell pushing to get more federal judges confirmed, and several members wanting the Senate to act on a Syria-Turkey resolution, items such as the SECURE Act remain on the back burner.
A vote on raising the debt ceiling will consume legislative time next month, and the majority leader confirmed this week that he will hold an impeachment trial if the House sends the Senate articles of impeachment on President Donald Trump.
If that happens, all Senate business will likely grind to a halt. Three GOP senators have reportedly placed "holds" on the SECURE Act, and their concerns could be resolved through floor debate. Or some or all of the bill provisions could be folded into a year-end budget bill.
Until then, supporters continue to wait -- and lobby.
InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at firstname.lastname@example.org. Follow him on Twitter @INNJohnH.
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