secure act

[Tom Poje]

supposedly this is to be voted on this week. some of the provisions in the modified Bill are

Min Distributions increases to 72 in 2023 and age 75 in 2029

‘‘(I) for calendar years before

2023, age 701⁄2,

 ‘‘(II) for calendar years 2023, 2024, 2025, 2026, 2027, 2028, and 2029, age 72, and ‘‘(III) for calendar years after 2029, age 75.

I guess this overrides the DOL by saying if you self correct too bad DOL 

(b) LOAN ERROR.—The Secretary of Labor shall  treat any loan error corrected pursuant to subsection (a)  as meeting the requirements of the Voluntary Fiduciary

 Correction Program of the Department of Labor.

You can be late by 6 months for min distributions  

(d) REQUIRED MINIMUM DISTRIBUTION CORRECTIONS.—The Secretary shall expand the Employee Plans

 Compliance Resolution System to allow plans to which  such system applies and custodians and owners of individual retirement plans to self-correct, without an excise  tax, any inadvertent failures pursuant to which a distribution is made no more than 180 days after it was required  to be made.

 

 catch up may start at age 50 but if you are 60 you get even more

SEC. 121. HIGHER CATCH-UP LIMIT TO APPLY AT AGE 60.

(a) IN GENERAL.—

(1) PLANS OTHER THAN SIMPLE PLANS.—Section 414(v)(2)(B)(i) is amended by inserting the following before the period: ‘‘($10,000, in the case of an eligible participant who has attained age 60 before the close of the taxable year)’’.

 

 don't have to keep giving notices to people who aren't deferring, etc

‘‘SEC. 111. ELIMINATING UNNECESSARY PLAN REQUIREMENTS RELATED TO UNENROLLED PARTICIPANTS.

1. IN GENERAL.—Notwithstanding any other provision of this title, with respect to any individual account plan, no disclosure, notice, or other plan document (other than the notices and documents described in paragraphs (1) and (2)) shall be required to be furnished under this title to any unenrolled participant if the unenrolled participant receives

 

 you may have to let long time part timers into the plan to defer but no top heavy, etc.

 

‘‘(i) NONDISCRIMINATION RULES.—In the case of employees who are eligible to participate in the arrangement solely by reason of paragraph (2)(D)(ii)—‘‘(I) notwithstanding subsection (a)(4), an employer shall not be required to make nonelective or matching contributions on behalf of such employees even if such contributions are made on behalf of other employees

eligible to participate in the arrangement, and‘‘(II) an employer may elect to exclude such employees from the ap1 plication of paragraphs (3), (11),(12), (13), and (15), subsection

(a)(4), paragraphs (2), (10), (11), (12), and (13) of subsection (m), and section 410(b).

‘(ii) TOP-HEAVY RULES.—An employer may elect to exclude all employees who are eligible to participate in a plan maintained by the employer solely by reason of paragraph (2)(D)(ii) from the application of the vesting and benefit requirements under subsections (b) and (c) of section 416.

 

.............

I didn't see anything in the Bill that eliminates 3% safe harbor notice or allows you to add safe harbor after the fact, but maybe that is buried elsewhere.

[RatherBeGolfing]

1 hour ago, Tom Poje said:

I didn't see anything in the Bill that eliminates 3% safe harbor notice or allows you to add safe harbor after the fact, but maybe that is buried elsewhere.

I don't have it in front of me, but I believe it is Section 103.  It does not explicitly eliminate the safe harbor notice, but the it is not included as a requirement.  The committee report explained that it was no longer a requirement, but that you are still required to give a participant reasonable opportunity to make an election.  I'm pretty sure that was current as of 5/21/19, can you link to what you read?

[Tom Poje]

RBG

I think it's one of the differences between the House version and the Senate version

 

https://www.portman.senate.gov/sites/default/files/2019-05/Retirement%20Security%20%26%20Savings%20Act%20-%202019%20final_0.pdf

 

Cardin and Portman’s Retirement Security and Savings Act of 2019 (link posted above) overlaps with some provisions in the Retirement Enhancement and Savings Act (RESA) of 2019, which was introduced on April 1, but RESA only raised the RMD age to 72.

The RESA bill, introduced by Senate Finance Committee Chairman Chuck Grassley, R-Iowa, and ranking member Ron Wyden, D-Ore., is similar to H.R. 1994, the Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019, which is expected to get a vote on the House floor before Memorial Day weekend.

[RatherBeGolfing]

Ok I see the confusion.  I think the Portman-Cardin bill is actually an new bill in addition to RESA rather than a modified version.  Most of the calls I have been on discuss RESA separate from the Portman-cardin bill. RESA pretty much mirror SECURE and the SH stuff is in Section 104 I think.

My understanding is that the expectation is to pass RESA with some of Portman-Cardin, and then try to pass some additional parts of Portman-Cardin on it's own down the road.  

[Peter Gulia]

This afternoon, the House of Representatives passed (417-3) the SECURE Act bill.

 

[Tom Poje]

I see according to one article (from Groom Law Firm)nothing may happen on this, which is the opposite of what I originally heard that there was wide support in the Senate for this.

Senate leadership is now considering whether and how to move the SECURE Act. At this point, it does not appear that Majority Leader McConnell (R-KY) will bring the bill up for a full floor consideration this year, so Senate leadership is attempting to move the bill via unanimous consent, which is only possible if no Senator objects. Currently, there appears to be at least one objection. Another possible option is to attach the SECURE Act to a larger, must-pass bill, such as a spending bill later this year.

[RatherBeGolfing]

How recent was the Groom article?  I have seen some from the last couple of hours that are still pretty positive, though not from Groom

[Peter Gulia]

Some speakers sound an optimistic note because the speaker or her client has a business interest in having an audience perceive some realistic chance for this legislation.

 

But as little as one spoiler can kill a bill.  Just to pick one example:

 

Chairman Neal stripped out of the bill a provision that would make homeschooling expenses a § 529-qualified expense.  House Democrats wanted to quiet objections from public-school teachers.  A Senator who supports homeschooling might insist that a Senate bill include the dropped provision.  Under the Senate’s rules and customs, even one objection could derail a bill from getting a vote.  Or if a bill includes this or another Republican provision passes the Senate, it could force a reconciliation showdown that might make it too difficult for both bodies of Congress to pass the same bill.

 

The Groom article seems right in suggesting the best hope for those who favor SECURE/RESA legislation is a tuck-in with whatever appropriations, budget, or debt-ceiling legislation Congress perceives as must-pass.

[Tom Poje]

https://www.groom.com/resources/house-passes-bipartisan-retirement-reform-legislation/

this was on the benefits link newsletter this morning

.............

I was curious on min distributions. on Relius I have my own report. I can modify it so changed to age 72 and min acct balance of 50000.

original data pull - produced reports for 117 plans. this includes possible distributions (e.g. actives who would need if they quit before the end of the year.

age 72 - pulled 9 less plans. oooh boy major change NOT

min acct balance - only pulled 19 plans. now that would be a significant change.