Pub. 1 2020 Issue 3

13 ISSUE 3 | 2020 UNFINISHED RETIREMENT BUSINESS AWAITS CONGRESS IN 2020 MIKE RAHN – ASCENSUS ERISA CONSULTANT M ore than a decade passed between the Pension Protection Act (PPA) of 2006 and the extensive retirement saving changes enacted last December. The industry is now adjusting to many new rules, some of which took effect a mere 12 days after the legislation was signed into law by President Trump December 20, 2019. The Setting Every Community Up for Retirement Enhancement (SECURE) Act — contained within the broader Further Consolidated Appropriations Act (FCAA), 2020 — was the vehicle for these changes. So what’s next? If the past was a reliable predictor of the future, there would be little expectation of more change any time soon. Before PPA, the last major retirement legislation had been enacted in 1996 and 1997, roughly a decade earlier. This time, however, a similar hiatus of 10 or more years is not expected. President Trump’s signature on the legislation was barely dry before key lawmakers in Congress had declared that they would not be resting on their retirement laurels in 2020. Several experienced, high-profile lawmakers who consider retirement security an urgent, high-priority issue are expected to be visible in 2020. Ways and Means Chairman’s Retirement Initiatives Rep. Richard Neal (D-MA), Chairman of the key tax-writing House Ways and Means Committee — and a driving force behind the SECURE Act — was quoted in January of this year promising to resurrect two retirement bills he introduced in 2017. These introductions occurred before the Democrats’ 2018 recapture of a House of Representatives majority, and Neal’s elevation to the committee chairmanship. One of these bills is the Retirement Plan Simplification and Enhancement Act (RPSEA), which would make a number of changes to current rules governing IRAs and employer plans. These are intended to help Americans save more and preserve their retirement assets, more easily claim available tax credits, and simplify the correction of common compliance errors. A second Neal bill is the Automatic Retirement Plan Act (ARPA), which would require all but the smallest employers to establish a retirement plan if they do not have one. RPSEA Of the two Rep. Neal-authored bills described above, RPSEA is the one most IRA-focused, though not exclusively. The following provisions were contained in the bill from 2017. If this bill is reintroduced, the provisions will likely be similar in many respects, but there may be some differences. • Exempt $250,000 of combined IRA and employer plan assets from required minimum distributions (RMDs). • Increase the RMD age to 73, with incremental increases thereafter tied to life expectancy changes (the SECURE Act has raised the RMD age to 72). • Permit nonspouse beneficiaries to indirectly roll over (within 60 days) inherited IRA and employer plan assets, something only spouse beneficiaries may now do. • Expand the IRS Employee Plans Compliance Resolution System (EPCRS), to include IRAs — not just employer plans — and expand the