JOINT COMMITTEE ON TAXATION May 3, 2021 JCX-22-21 - Committee on Ways and Means - ESTIMATED REVENUE EFFECTS OF H.R. ___, THE "SECURING A STRONG RETIREMENT ACT OF 2021,’’ SCHEDULED FOR MARKUP BY THE COMMITTEE ON WAYS AND MEANS ON MAY 5, 2021 Fiscal Years 2021 - 2031 [Millions of Dollars]  ProvisionEffective202120222023202420252026 202720282029203020312021-262021-31                  I. Expanding Coverage and Increasing Retirement Savings -------426-633-637-696 -720-727-734-743-752   1.Expanding automatic enrollment in retirement plans [1]......pyba 12/31/22            -2,393-6,070 2.Modification of credit for small employer pension plan ----39-133-239-321-367 -386-394-398-402-405    startup costs...........................................................................tyba 12/31/21            -1,099-3,084 3.Promotion of Saver's credit...................................................DOE-------7-15-23-32 -42-53-65-78-93-77-409 4.Enhancement of 403(b) plans................................................aia 12/31/21- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - NegligibleRevenue Effect - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 5.Increase in age for required beginning date for ----380-383-364-339-376 -373-378-1,427-1,504-1,345    mandatory distributions.........................................................[2]            -1,842-6,869 6.Indexing IRA catch-up limit..................................................tyba 12/31/22----------------17 -20-19-18-40-38-17-153 7.Higher catch-up limit to apply at age 62, 63 and 64.............tyba 12/31/22----116-163-173-185-212 -232-246-260-275-291-849-2,153 8.Multiple employer 403(b) plans [3]......................................pyba 12/31/21----3-7-9-12-17 -21-26-30-34-40-48-199 9.Treatment of student loan payments as elective deferrals ----63-100-139-184-222 -239-253-269-281-292    for purposes of matching contributions [4]...........................cmf pyba 12/31/21            -708-2,042 10.Application of credit for small employer pension plan [6]-4-10-16-20-23 -25-27-29-31-34    startup costs to employers which join an existing plan.........[5]            -74-221 11.Military spouse retirement plan eligibility credit for ----14-18-19-19-21 -22-23-24-25-26    small employers. [7]..............................................................tyba DOE            -91-211 12.Small immediate financial incentives for contributing to                 a plan.....................................................................................pyba DOE- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - NegligibleRevenue Effect - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 13.Safe harbor for corrections of employee elective 305153565860 6264666871    deferral failures......................................................................[8]            308639 14.One-year reduction in period of service requirement for -8-12-14-16-19-24 -29-31-34-38-42    long-term, part-time workers [9]...........................................[10]            -94-268 15.Findings relating to S corporation ESOPs.............................---- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - NegligibleRevenue Effect - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Total of Expanding Coverage and Increasing Retirement Savings.............................22-581-1,209-1,567-1,701-1,948-2,048-2,114-3,223-3,383-3,286-6,984-21,040 II. Preservation of Income                1.Remove required minimum distribution barriers for life ----64-122-158-175-190 -160-101147458808    annuities.................................................................................DOE            -708445 2.Qualifying longevity annuity contracts ................................[11]-6-4-4-4-5-6 -6-6-6-7-7-29-61 3.Insurance-dedicated exchange-traded funds.........................[12]------------------ ----68-171-263-364----866 Total of Preservation of Income......................................................................................-6-68-126-162-180-196 -166-175-30188437-737-482  Page 2  ProvisionEffective202120222023202420252026202720282029203020312021-262021-31                 III. Simplification and Clarification of Retirement Plan Rules 702208020-2010-20-70-90-100-100   1.Recovery of retirement plan overpayments...........................DOE           380--- 2.Reduction in excise tax on certain accumulations in ----7-9-9-9-9-10-10-10-10-10    qualified retirement plans......................................................tyba 12/31/21           -43-93 3.Performance benchmarks for asset allocation funds.............DOE- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - NegligibleRevenue Effect - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 4.Review and report to the Congress relating to reporting                and disclosure requirements..................................................DOE- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - NegligibleRevenue Effect - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 5.Eliminating unnecessary plan requirements related to                unenrolled participants..........................................................pyba 12/31/21- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - NegligibleRevenue Effect - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 6.Retirement savings lost and found........................................various----------35-49-50-52-53-55-57-59-134-410 7.Expansion of Employee Plans Compliance Resolution -2-3-4-4-4-4-4-4-4-4-4    System...................................................................................DOE           -20-40 8.Eliminate the ‘‘first day of the month’’ requirement for                governmental section 457(b) plans........................................tyba DOE- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - NegligibleRevenue Effect - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 9.One-time election for qualified charitable distribution                to split-interest entity; increase in qualified charitable -3-964-445-94-61-80-94-108-123-138-156    distribution limitation............................................................dmi tyea DOE           -1,648-2,266 10.Distributions to firefighters...................................................dma 12/31/21---[13][13][13][13][6][6][6]-1-1-1[6]-2 11.Exclusion of certain disability-related first responder -------------------319-512-545-579-615    retirement payments..............................................................arwrt tyba 12/31/26           ----2,570  12. Individual retirement plan statute of limitations for excise tax on excess contributions and certain  accumulations........................................................................DOE-2-3-3-3-2-2-2-2-2-2-2-15-25 13.Requirement to provide paper statements in certain                cases.......................................................................................pyba 12/31/22- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Negligible Revenue Effect - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 14.Separate application of top heavy rules to defined 429313335374043454952    contribution plans covering excludible employees...............pyba DOE           170398 15.Repayment of qualified birth or adoption distribution                limited to 3 years...................................................................[14]- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Negligible Revenue Effect - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 16.Self-certification for deemed hardship contributionspyba 12/31/21634394246525146393121219407 17.Penalty-free withdrawals from retirement plan in case                of domestic abuse..................................................................dma DOE-4-4-4-4-4-4-4-4-4-4-4-25-47 18.Reform of family attribution rule [15]...................................pybo/a DOE----16-33-50-68-94-117-137-157-175-194-261-1,042 19.Amendments to increase benefit accruals for previous                plan year allowed until employer tax return due date...........pyba 12/31/22- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Negligible Revenue Effect - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 20.Retroactive first year elective deferrals for sole                proprietors..............................................................................pyba DOE- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Negligible Revenue Effect - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 21.Limiting cessation of IRA treatment to portion of                account involved in a prohibited transaction.........................tyba DOE-2-3-3-3-3-3-4-4-4-4-4-16-37 Total of Simplification and Clarification of Retirement               Plan Rules..........................................................................................................................67-716-352-107-139-146-535-816-910-995-1,076-1,393-5,727 IV. Technical Amendments…............................................................[16]-----------------------------------------Negligible Revenue Effect - - - --------------------------------------  Page 3 ProvisionEffective2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2021-26 2021-31                                           V. Administrative Provisions - Provisions Relating to Plan                                        Amendments..................................................................................DOE- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Negligible Revenue Effect - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - VI. Revenue Offsets 117284053687587100118124      1. SIMPLE and SEP Roth IRAs................................................tyba 12/31/21           207 711  2. Hardship withdrawal rules for 403(b) plans..........................pyba 12/31/21819314559677173747679230 602  3. Elective deferrals generally limited to regular contribution ---2,8923,6943,5403,0602,4931,737572-616-1,603-2,542      limit........................................................................................tyba 12/31/21           15,678 13,225  4. Optional treatment of employer matching contributions                                        as Roth contributions.............................................................cma DOE2401,2521,5041,7391,4801,9531,5161,2561,0346592348,168 12,868  Total of Revenue Offsets….............................................................................................2494,1805,2585,3644,6524,5813,3991,988592-750-2,10524,28427,407                             NET TOTAL …………………………………………………………………………………333 2,815 3,571 3,529 2,632 2,292 650 -1,117 -3,571 -4,940 -6,031 15,171 158                                           Joint Committee on Taxation                                        --------------------------------------                                        NOTE: Details may not add to totals due to rounding. The date of enactment is assumed to be July 1, 2021. Revenue provisions as stated in statutory language NEAL_019, May 2, 2021.            Legend for "Effective" column:                                        aia = amounts invested after    dma = distributions made after            pybo/a = plan years beginning on or after   arwrt = amounts received with respect to    dmi = distributions made in            tyba = taxable years beginning after      cma = contributions made after    DOE = date of enactment               tyea = taxable years ending after      cmf = contributions made for    pyba = plan years beginning after                           [1] Estimate includes the following budget effects: 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2021-26 2021-31                                           Total Revenue Effect.................................................................................................. ---  ----426-633-637-696-720-727-734-743-752-2,393 -6,070  On-budget effects....................................................................................................-------385 -579 -584 -644 -669 -677 -685 -694 -704 -2,192 -5,621  Off-budget effects....................................................................................................-------41 -54 -53 -52 -51 -51 -50 -49 -48 -201 -449   [2] Effective for distributions required to be made after 12/31/21, with respect to individuals who attain age 72 after such date. Increase in RMD age to 73 beginning on January 1, 2022. Further increase in RMD age to 74 on January 1, 2029 and increase in RMD to age 75 on January 1, 2032.[3]Estimate includes the following budget effects:2021 2022 2023202420252026202720282029203020312021-262021-31 Total Revenue Effect.................................................................................................. --- -3 -7 -9 -12 -17 -21 -26 -30 -34 -40 -48 -199 On-budget effects....................................................................................................----3 -6-8-11-15-19-23-27-31-36-43-179 Off-budget effects....................................................................................................-------1-1-1-2-2-3-3-3-4-5-20[4]Estimate includes the following budget effects:2021 2022 2023202420252026202720282029203020312021-262021-31 Total Revenue Effect.................................................................................................. --- -63 -100 -139 -184 -222 -239 -253 -269 -281 -292 -708 -2,042 On-budget effects....................................................................................................----49 -78-109-144-177-192-203-216-226-235-557-1,629 Off-budget effects....................................................................................................----14 -22-30-40-45-47-50-53-55-57-151-413 [5] Effective for eligible employer plans which become effective with respect to the eligible employer after the date of the enactment of this Act. [6] Loss of less than $500,000.     [Footnotes for JCX-22-21 are continued on following page] Page 4       Footnotes for JCX-22-21 continued: [7]Estimate includes the following budget effects:2021 202220232024202520262027 20282029203020312021-262021-31 Total Revenue Effect.................................................................................................. --- -14 -18 -19 -19 -21 -22 -23 -24 -25 -26 -91 -211 On-budget effects....................................................................................................----13-17-18-18-20-21 -22-23-24-25-86-201 Off-budget effects....................................................................................................----1-1-1-1-1-1 -1-1-1-1-5-10[8]Effective with respect to any errors with respect to which the date referred to in section 414(aa) (as added by this provision) is after the date of enactment of this Act.           [9]Estimate includes the following budget effects:2021 202220232024202520262027 20282029203020312021-262021-31 Total Revenue Effect.................................................................................................. -8 -12 -14 -16 -19 -24 -29 -31 -34 -38 -42 -94 -269 On-budget effects....................................................................................................-7-11-13-15-17-22-26 -28-31-34-37-85-244 Off-budget effects....................................................................................................-1-1-1-1-2-2-3 -3-3-4-4-826 [10] Effective as if included in the addition of section 401(k)(2)(D)(ii) by section 112 of the Setting Every Community Up for Retirement Enhancement Act of 2019, Division O of Pub. L. 116-94. [11] For paragraph (1) of subsection (a) of section 202 of this Act, effective on or after the date of enactment. For paragraphs (2) and (3) of subsection (a) of section 202 of this Act, effective with respect to contracts purchased or received in an exchange on or after July 2, 2014.[12] For subsection (a) of section 203 of the Act, effective on the date of enactment. For subsections (b) and (c), effective with respect to segregated asset account investments made on or after the date that is seven years after the date of enactment.[13] Gain of less than $500,000. [14] Effective as if included in the enactment of section 113 of the Setting Every Community Up for Retirement Enhancement Act of 2019, Division O of Pub. L. 116-94. [15]Estimate includes the following budget effects:2021 2022202320242025202620272028 2029203020312021-262021-31 Total Revenue Effect.................................................................................................. --- -16 -33 -50 -68 -94 -117 -137 -157 -175 -194 -261 -1,042 On-budget effects....................................................................................................----14-28-42-58-81-101-118 -134-149-163-223-887 Off-budget effects....................................................................................................----2-5-7-10-13-16-20 -23-27-31-38-154[16]Effective as if included in the applicable section of the Setting Every Community Up for Retirement Enhancement Act of 2019, Division O of Pub. L. 116-94, to which it relates.          

Retirement Expansion Bill Would Raise $158 Million, JCT Says

Retirement Expansion Bill Would Raise $158 Million, JCT Says

U.S. Joint Committee on Taxation

The Securing a Strong Retirement Act of 2021, scheduled for markup by the House Ways and Means Committee, would raise $158 million from 2021 to 2031, according to a May 3 report (JCX-22-21) by the Joint Committee on Taxation.

The Securing a Strong Retirement Act of 2021, scheduled for markup by the House Ways and Means Committee, would raise $158 million from 2021 to 2031, according to a May 3 report (JCX-22-21) by the Joint Committee on Taxation.

The Securing a Strong Retirement Act of 2021, scheduled for markup by the House Ways and Means Committee, would raise $158 million from 2021 to 2031, according to a May 3 report (JCX-22-21) by the Joint Committee on Taxation. Provisions to expand retirement plan coverage and increase savings would cost a total of $21 billion over 10 years, according to the report. Expanding automatic enrollment for retirement plans would cost $6 billion, and increasing the age for required beginning dates for mandatory distributions would cost $6.9 billion. The JCT estimated that provisions modifying retirement plan rules would cost $5.7 billion from 2021 to 2031. Among those is a provision to allow a one-time election for qualified charitable distributions and increase the charitable distribution limit, which would cost $2.4 billion over the same period. Revenue provisions of the bill would raise $27.4 billion, the JCT estimated. Included are proposals to limit elective deferrals to regular contribution limits and to allow employer-matching contributions to be treated as Roth contributions, which would raise $13.2 billion and $12.9 billion, respectively.

The Securing a Strong Retirement Act of 2021, scheduled for markup by the House Ways and Means Committee, would raise $158 million from 2021 to 2031, according to a May 3 report (JCX-22-21) by the Joint Committee on Taxation. Provisions to expand retirement plan coverage and increase savings would cost a total of $21 billion over 10 years, according to the report. Expanding automatic enrollment for retirement plans would cost $6 billion, and increasing the age for required beginning dates for mandatory distributions would cost $6.9 billion. The JCT estimated that provisions modifying retirement plan rules would cost $5.7 billion from 2021 to 2031. Among those is a provision to allow a one-time election for qualified charitable distributions and increase the charitable distribution limit, which would cost $2.4 billion over the same period. Revenue provisions of the bill would raise $27.4 billion, the JCT estimated. Included are proposals to limit elective deferrals to regular contribution limits and to allow employer-matching contributions to be treated as Roth contributions, which would raise $13.2 billion and $12.9 billion, respectively.