The chairman and ranking member of the House Education and Labor Committee has introduced bipartisan legislation that partially overlaps the SECURE Act 2.0. In early November, committee Chairman Bobby Scott (D-VA); Rep. Virginia Foxx (R-NC), the committee’s ranking Republican; Rep. Mark DeSaulnier (D-CA), Chairman of the Subcommittee on Health, Employment, Labor and Pensions (HELP) Committee; and Rep. Rick Allen (R-GA), the HELP Subcommittee’s ranking Republican, introduced the Retirement Improvement and Savings Enhancement (RISE) Act (H.R. 5891).
Although almost all the provisions in the bill are also contained within the SECURE Act 2.0, the House Ways and Means Committee and the Education and Labor Committee continue to share jurisdiction over retirement issues.
Included in the RISE Act are the following changes, according to a summary.
Multiple Employer 403(b) Plans.
The legislation would broaden the scope of the SECURE Act’s pooled employer plan or open multiple employer plan provisions to facilitate and allow unrelated public education and other non-profit employers to join a single 403(b) plan.
Pooled Employer Plan Modification.
This section clarifies that a named fiduciary is responsible for collecting contributions in a PEP and implementing written contribution collection procedures that are reasonable, diligent, and systematic. One or more trustees will remain responsible for holding assets of the plan.
Retirement Plan Modernization Act.
Currently, employers may transfer former employees’ retirement accounts from a workplace retirement plan into an Individual Retirement Account if their balances are between $1,000 and $5,000. The bill increases the limit from $5,000 to $7,000.
Small Immediate Financial Incentives for Contributing to a Plan.
Employers would be permitted to offer de minimis financial incentives, such as low-dollar gift cards to boost employee participation in workplace retirement plans.
Improving Coverage for Part-Time Workers.
The requirement for part-time workers to participate in an employer’s retirement savings plan would be reduced from three years of service with the employer to two years.
Retirement Savings Lost and Found.
A national online searchable database at the Department of Labor (DOL) would be established, enabling retirement savers who might have lost track of their pension or 401(k) plan, to search for the contact information of their plan administrator.
Performance Benchmarks for Asset Allocation Funds.
The DOL would be directed to update its guidelines regarding benchmarking investments, such as target-date funds, which include a mix of asset classes. This section also requires DOL to report to Congress on the effectiveness of its benchmarking requirements.
Eliminating Unnecessary Plan Requirements Related to Unenrolled Participants.
The requirement for employers to provide certain notices to employees who have not elected to participate in a workplace retirement plan would be removed. Employers would still be required to send annual eligibility notices to unenrolled participants to encourage participation.
Recovery of Retirement Plan Overpayments.
This section clarifies and improves the rules related to recouping overpayments to retirees to help plan sponsors and protect plan participants.
Review and Report to Congress Relating to Reporting and Disclosure Requirements.
The DOL, the Treasury Department, and the Pension Benefit Guaranty Corporation (PBGC) would be required to review reporting and disclosure requirements for pension plans and make recommendations to consolidate, simplify, standardize, and improve such requirements.
Review of Pension Risk Transfer Interpretive Bulletin.
This section requires DOL to review the current interpretive bulletin governing pension risk transfers and report its findings to Congress.
“We have a responsibility to create an economy where American workers can retire with dignity and security,” Scott said in a written statement. “These policies are a step in the right direction toward a more secure retirement for workers and their families. I am pleased to have partnered with Ranking Member Foxx, HELP Subcommittee Chair DeSaulnier, and HELP Subcommittee Ranking Member Allen on this bipartisan bill and look forward to advancing it in our committee this week.”
The SECURE Act 2.0 builds on the 2019 SECURE Act and includes several provisions advanced by the American Retirement Association. With the introduction of the RISE Act, there exists the possibility that the Committee may merge the two bills before action by the full House.
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