In this article we review the new committee leadership of the 116th Congress and note two significant Senate bipartisan retirement policy proposals introduced at the end of 2018.
New committee leadership
In the 116th Congress, the leadership of three of the four Congressional committees that oversee retirement policy has changed: Congressman Neal (D-MA) has taken over as Chairman of the House Ways and Means Committee; Congressman Scott (D-VA) has taken over as Chairman of the House Education and Labor Committee (formerly the “Education and the Workforce Committee”); and Senator Grassley (R-IA) has taken over as Chairman of the Senate Finance Committee. There is no change in leadership at the Senate Health, Education, Labor and Pensions (HELP) Committee, where Senator Alexander (R-TN) remains Chairman.
Congressman Neal has had a long-term interest in retirement policy issues, introducing, at the end of 2017, two significant pieces of retirement policy legislation: the Automatic Retirement Plan Act of 2017 and the Retirement Plan Simplification and Enhancement Act of 2017. On January 9, 2019, he introduced his first bill since taking over committee leadership – the Rehabilitation for Multiemployer Pensions Act, “address[ing] the nation’s worsening multiemployer pension crisis.” That bill has 9 Democratic and Republican co-sponsors.
Congressman Scott is a co-sponsor of the Rehabilitation for Multiemployer Pensions Act. The Education and Labor Committee’s new website identifies the retirement plan “coverage gap” and “conflicted advice” as critical retirement policy issues.
In the 115th Congress, the Senate Finance Committee (led by retired Senator Hatch (R-UT)) took the lead in the Senate in crafting bipartisan retirement policy legislation, most significantly the Retirement Enhancement and Savings Act of 2018 (RESA). Senator Wyden (D-OR) remains the committee’s Ranking Member.
Portman Cardin 2018 introduced
On December 19, 2018, Senator Portman (R-OH) introduced the “Retirement Security and Savings Act of 2018.” The bill generally tracks the draft circulated in October 2018.
Highlights include proposals:
Aimed at expanding retirement plan coverage and increasing retirement savings, including: a new 401(k) ADP testing safe harbor; a small employer matching contribution credit; an increase in the small plan startup credit; a small employer re-enrollment credit; an expansion of the Saver’s Credit; a requirement that 401(k) plans allow long-term part-time employees to participate.
Increasing the 401(k) contribution catch-up limit from $5,000 to $10,000 for individuals age 60 and over (not included in the original draft).
Treating student loan repayments as elective deferrals for purposes of 401(k) matching contributions.
Simplifying of auto-enrollment/escalation rules.
Relaxing of the rules for the correction of inadvertent errors and for an expansion of the Employee Plans Compliance Resolution System (EPCRS).
Increasingthe flexibility of current required minimum distribution (RMD) rules.
Instructing DOL and Treasury to adopt regulations allowing for the consolidation of a number of Internal Revenue Code- and ERISA-required notices. The proposal would also instruct Treasury to simplify current distribution notice rules.
Eliminating of “double indexing” of the Pension Benefit Guaranty Corporation variable-rate premium that applies to underfunded single employer plans.
Instructing Treasury to “correct” recently adopted mortality regulations to provide that 2018 valuations shall be based on Mortality Improvement Scale MP–2017 and that for valuations thereafter “mortality improvement rates shall not assume future mortality improvements at any age which are greater than .78 percent.”
Bipartisan electronic participant communication legislation introduced in the Senate
On the same day (December 19, 2018), Senator Brown (D-OH), together with a bipartisan group of co-sponsors, introduced the Receiving Electronic Statements to Improve Retiree Earnings (RETIRE) Act. The bill is identical to HR 4610, introduced in the House in December 2017. The bill provides that any document required or permitted to be furnished to a participant under ERISA could be provided in electronic form provided:
The electronic system used (e.g., email or a website) is “designed to result in effective access to the document.”
The system permits the participant to select among the specific electronic delivery options through which documents would be furnished, change that selection or elect at any time to receive documents in paper (at no additional cost).
The system protects the confidentiality of the participant’s personal information.
An annual paper notice is provided describing the participant’s current selection (e.g., to receive notices via email) and the right to change it.
The electronic document: “(A) is prepared and furnished in a manner that is consistent with the style, format, and content requirements applicable to the particular document, and (B) includes a notice that apprises the individual of the significance of the document when it is not otherwise reasonably evident as transmitted.”
While the two proposals described above were introduced at the end of the last (115th) Congress, they are likely to be on the table in any discussion of reform in the 116th Congress.
The current divided government may make cooperation on bipartisan retirement policy issues a “heavy lift.” In that regard, Democratic commitment to legislation addressing the multiemployer plan funding crisis may present an opening.
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We will continue to follow these issues.