New Bill Includes RMD Increase, Income Annuity and Student Loan Provisions
May 24, 2021 by Allison Bell
Two senators have tossed another bill into the river of retirement legislation flowing into the Senate Finance Committee and the House Ways and Means Committee.
Sens. Ben Cardin, D-Md., and Rob Portman, R-Ohio, last week introduced S. 1770, the “Retirement Security & Savings Act” bill.
Key provisions in the bill would:
- Increase the required minimum distribution age, or age when retirement account users have to begin taking out cash, to 75, from 72, by 2032.
- Let nonprofit employers’ 457 defined contribution retirement plans, as well as nonprofit employers’ 403(b) tax-sheltered annuity plans, into the multiple employer plans, or MEPs, that were created by the Secure Act.
- Make it easier for people to use “qualifying longevity annuity contracts,” or deferred income annuities designed to meet government standards, to provide guaranteed streams of lifetime income once they are very old, by, for example, increasing the dollar limitation on QLAC premiums to $200,000, from $125,000.
- Help employees find lost retirement accounts by creating a national, online database of lost accounts.
- Create a new, three-year, $500-per-year tax credit tax credit for small businesses that automatically re-enroll plan participants into an employer-sponsored defined contribution retirement plan at least once every three years.
- Enable employers to put matching contributions into workers’ 401(k) plan accounts or other defined contribution retirement plan accounts when the workers make student loan payments, as well as when the workers make contributions to the plans.