House Panel Passes Retirement Bill to Raise RMD Age, Boost Annuities

House Ways and Means Chairman Richard Neal, D-Mass.

The House Ways and Means Committee on Tuesday passed H.R. 1994, the Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019, which makes it easer to offer annuities in 401(k) and 403(b) plans, raises the age for taking required minimum distributions from 70 1/2 to 72, and expands 529 plan use to homeschooling.

During the bill's Tuesday morning markup, Committee Chairman Richard Neal, D-Mass., stated that one of his "top priorities" as chairman "is to help workers of all ages prepare for a financially secure retirement."

Americans, he continued, "currently face a retirement income crisis, with too many people in danger of not having enough savings to maintain their standard of living and avoid sliding into poverty. The SECURE Act goes a long way in addressing this problem by making it easier for Americans to save. Passage of this bill is a tremendous bipartisan accomplishment, and I hope to see the measure move through Congress and be signed into law in short order."

Rep. Ron Kind, D-Wis.; ranking member Kevin Brady, R-Texas; and Rep. Mike Kelly, R-Pa.; co-sponsored the House bill.

Brian Graff, CEO of the American Retirement Association, expects the full House to take up the bill "relatively soon."

Senate Finance Committee Chairman Chuck Grassley, R-Iowa, and ranking member Ron Wyden, D-Ore., on Monday introduced the Retirement Enhancement and Savings Act (RESA) of 2019 on Monday, the companion bill to the SECURE Act.

No committee action on the Senate RESA bill is scheduled yet.

The House bill expands 529 education savings accounts to cover costs associated with registered apprenticeships; homeschooling; up to $10,000 of qualified student loan repayments (including those for siblings); and private elementary, secondary or religious schools.

It also allows for the treatment of certain taxable non-tuition fellowship and stipend payments as compensation for IRA purposes, enabling students to begin saving for retirement.

Wayne Chopus, president and CEO of the Insured Retirement Institute, said Tuesday that "whatever partisan divides exist in politics today, Democrats and Republicans showed today that they can come together to advance policies to benefit American workers."

H.R. 1994 "will expand employee access to workplace retirement plans and will make it easier for plans to offer lifetime income options."

— Related on ThinkAdvisor: