The U.S. Senate Finance Committee this week approved a series of proposals aimed at changing the American retirement system, which has the potential to set the stage for the passage of a new retirement law sometime in 2022. This is according to reporting at CNBC.
“Called the Enhancing American Retirement Now (EARN) Act, the measure contains some provisions that are the same or similar to those proposed in the House, which passed the Securing a Strong Retirement Act (H.R. 2954) in late March in a bipartisan 414-5 vote,” the reporting details.
The EARN Act has been referred to by some as “SECURE 2.0,” describing it as a follow-up to the Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019 which was signed into law by President Donald Trump in December 2019 after passing the U.S. House of Representatives and Senate. That law was the first major retirement-centric legislation to be passed since 2006.
Some of its provisions included raising the minimum age for required minimum distributions from 70.5 to 72 years of age; and allowing workers to contribute to traditional IRAs after turning 70.5 years of age among some other key changes.
“[The EARN Act] is intended to build upon the original Secure Act of 2019, which ushered in changes aimed at increasing retirement security by increasing access to workplace savings plans, among other efforts,” CNBC reports.
Finance Committee Chairman Ron Wyden (D-Ore.) describes the EARN Act as introducing “more than 70 proposals” designed to encourage more Americans to save for retirement, and lauded the bipartisan collaboration from Democrats and Republicans that the proposed legislation has had.
The House passed a version of EARN earlier this year, and the version reviewed by the Senate shares attributes with it, according to the reporting.
“Many provisions on the Senate side are the same as what cleared the House, including one to make it easier for employers to make contributions to 401K plans (and similar workplace plans) on behalf of employees who are making student loan payments instead of contributing to their retirement plan,” the article reads.
The proposed law would also allow seniors to save more money through “catch-up contributions” to their 401K plans, and raise the age for when seniors must start taking distributions from their retirement accounts.
Read the coverage at CNBC.