The House Ways and Means Committee marks up H.R. 6757 Thursday. (Photo: House Ways and Means)
Life insurance groups say they are happy to see the House Ways and Means Committee vote to endorse H.R. 6757 — a package of proposed Internal Revenue Code changes related to retirement savings and other forms of saving.
But the American Council of Life Insurers (ACLI) and the Insured Retirement Institute (IRI) say they want the House to pass more of the provisions included in another retirement savings bill, the Retirement Enhancement and Savings Act (RESA) bill.
House Ways and Means members voted 21-14 Thursday to support H.R. 6757 — the “Family Savings Act of 2018″ bill.
All Republicans who participated voted in favor of the bill. All Democrats who participated voted against it.
H.R. 6757 would:
- Make it easier two or more employers to join together to offer “multiple employer plans,” or MEPs.
- Add a lifetime income “portability” provision. If a retirement plan got rid of a lifetime income arrangement, it could use this provision to let the lifetime income arrangement users move the associated assets into another retirement savings arrangement.
- Ease the current required minimum distribution rules for older retirement plan users.
- Create a new type of savings account, the “universal savings account” (USA), that could be used to pay for any type of expense. An eligible individual would be able to contribute up to $2,500 to a USA each year without including the cash in taxable income.
The MEP provision and the lifetime income portability provision come from the RESA proposal, according to the ACLI.
The ACLI says it believes the version of H.R. 6757 that the House Ways and Means Committee approved leaves out two key RESA provisions.
One RESA provision left out would encourage retirement plan sponsors to add annuitization options, or arrangements that can convert part or all of a worker’s plan assets into a lifetime stream of retirement income.
The other RESA provision left out would require a retirement plan to give each participant an illustration showing how the participant’s savings would translate into monthly retirement income.
Susan Neely, the ACLI’s new president, said in a statement that the House can and should do more to help Americans prepare for long periods of retirement.
“It can do this by making it easier for employers to offer annuities in their retirement plans,” Neely said in the statement. “Annuities can guarantee lifetime income for workers. They can help employers offer a plan that resembles in certain ways a traditional pension that guarantees a paycheck for life to a retiree.”
IRI President Cathy Weatherford put out a statement praising House Ways and Means Chairman Kevin Brady for his work on H.R. 6757.
“We appreciate Chairman Kevin Brady’s leadership in advancing this important legislation through the committee,” Weatherford said. “However, we should not miss this opportunity to do more to significantly boost retirement security.”
Congress should do more to increase workers’ access to products that can provide guaranteed lifetime retirement income, Weatherford said.