It looks like Tax Cuts 2.0 will incorporate a part of the Senate’s Retirement Enhancement and Savings Act or RESA (S. 2526) — which, among other things, would make it easier for small businesses to join multiple employer plans; encourage workers to save for retirement; and provide a safe harbor for employers offering annuities. A staffer on the Ways and Means Committee recently assured that the retirement section of the package would not include “Rothification.”
Unlike Tax Cuts 2.0, RESA has strong bipartisan support in the upper chamber. Senate Finance Ranking Member Ron Wyden (D-OR) would like to see it enacted as a standalone bill this year, but it’s unclear whether lawmakers would get the floor time needed to pass the bill.
Interestingly, Sens. Heidi Heitkamp (D-ND), Tom Cotton (R-AR), Cory Booker (D-NJ), and Todd Young (R-IN) introduced their own retirement related measures last week — some of which are reflected in RESA:
- S. 3218 – the Strengthening Financial Security Through Short-Term Savings Accounts Act would help employers to set up “rainy day” savings accounts for workers.
- S. 3219 – the Small Business Employees Retirement Enhancement Act would make it easier for small businesses to join multiple employer plans.
- S.3220 – the Refund to Rainy Day Savings Act would allow taxpayers to put away 20 percent of their tax refunds into a Refund Rainy Day Fund.
- S. 3221 – the Retirement Security Flexibility Act would encourage plan sponsors to use automatic enrollment and automatic escalation.
It remains to be seen whether the bill introductions are any indication of future Senate action on retirement — there appears to be a flicker of momentum to get a retirement package done this year.