The leaders of the House Ways and Means Committee have rolled out bipartisan legislation that would further help workers save for retirement as Democrats and Republicans failed to reach a deal on a stimulus package.
Ways and Means Committee Chair Richard E. Neal, D-Mass., and ranking member Kevin Brady, R-Texas, put aside their differences in the latest push to overhaul retirement laws, building on last year's passage of the Setting Every Community Up for Retirement Enhancement (SECURE) Act (P.L. 116-94).
“Our legislation will make it easier for folks to save, protect Americans’ retirement accounts, and give workers more peace of mind as they plan for the future,” Brady said in an October 27 statement.
The Securing a Strong Retirement Act of 2020 would increase a tax credit to encourage small business owners to start a retirement plan. Small employers would be eligible for a tax credit equal to 100 percent of the costs of starting a pension plan, up from the previous 50 percent.
The bill includes a provision pushed by fellow Ways and Means Democrats to reform the savers credit that would increase the maximum credit amount from $1,000 per person to $1,500. It would also abolish the tiered structure for the savers credit and replace it with a flat 50 percent credit for contributions to defined contribution plans and IRAs of up to $2,000.
“The existing Saver’s tax credit leaves out far too many middle- and low-income families who make over $16,000, but this bill will ensure more workers are able to take advantage,” Ways and Means Committee member Judy Chu, D-Calif., said in a statement.
The retirement bill would also help charities by increasing the maximum charitable distribution from $100,000 to $130,000 from an individual IRA account upon reaching age 70½.
Neal and Brady have in the past been adamant that any legislation to improve retirement rules have bipartisan support and the ability to become law even in a divided Congress, as was showcased with the SECURE Act.
A Democratic aide said plans for the bill have not been solidified and there was no indication that lawmakers will tackle it before the end of the year, especially as discussions for another pandemic relief measure continue to flounder.
No Relief Before Election
Congress will likely have its hands full after the November 3 elections trying to pass another COVID-19 relief package after Senate Majority Leader Mitch McConnell, R-Ky., sent lawmakers home following the October 26 confirmation of Supreme Court Justice Amy Coney Barrett.
House Speaker Nancy Pelosi, D-Calif., said she remains optimistic that a deal in principle can be reached with the White House before Election Day.
But White House spokesperson Alyssa Farah on October 27 said only, “We are confident that we can get something in the coming weeks.”