Retirement bill close to passing Congress with widespread support from trade groups, financial firms
Last month, the House of Representatives passed the most significant piece of retirement savings legislation in the last 13 years with wide bipartisan support, the result of years of consistent lobbying efforts by the financial planning sector.
The Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019 passed the House 417-3. It puts in place various provisions to make it easier and more transparent for individuals to save for retirement.
The SECURE Act is derived mostly from the Retirement Enhancement and Security Act, a bill that has been carried through three congresses, but never passed. Since it was introduced, the financial planning industry has been pushing lawmakers to pass it into law.
More than 546 unique lobbying reports to the House and Senate have been filed on the bill from 89 different firms and organizations. Most of those firms or organizations pushing for the bill handle retirement assets and long-term financial planning. Some of the most frequent influencers include Nationwide, American Benefits Council, State Street Corp and Prudential.
“While access to worksite retirement plans is common for many in the workforce, there is still a significant portion of the working population that lacks access. The gap in workplace retirement plan coverage is most pronounced among employees of small employers.” said Principal Financial Group Vice President of retirement and income solutions Joni Tibbetts during Senate Financial Services Committee testimony last month. Her company and many of the other ones lobbying the bill stand to attract more customers if they have easier access to 401(k) plans as the legislation would provide.
Since many companies offer their employees 401(k) plans, the list of influencers wasn’t just limited to those directly dealing with the retirement process. The Girl Scouts, Boy Scouts of America, Boeing and Jewish Federations of North America have all lobbied the bill.
Many of the same firms are continuing to push for the bill this year as well. Aegon NV, Allstate, Nationwide, State Street, Prudential and Northwestern Mutual all filed reports indicating they were lobbying the bill.
The SECURE Act, which is now being considered by the Senate Financial Services committee, is slightly different than the Retirement Enhancement and Security Act that the groups have been lobbying for over the past year.
The only difference is that the SECURE Act doesn’t contain a clause that would allow parents to remove funds from 529 education savings plans (a college fund) to pay for private schools, religious schools or homeschooling. Democrats forced that provision out, and Republicans in the House agreed to pass the bill without it.
Without the private schooling provision, there’s almost enough support to pass the bill in the Senate through unanimous consent. However, at least two senators, Pat Toomey (R-Pa.) and Ted Cruz (R-Texas), have told Financial Services Committee Chair Chuck Grassley (R-Iowa) they would object. Unless they change their positions, the only two options are to lump the legislation into another bill or wait to bring it up for a roll call vote before the full Senate.
The latter requires some pushing and prodding of Senate Majority Leader Mitch McConnell (R-Ky.) who would decide when the bill could come up on the floor.
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