The most comprehensive retirement security package in years cleared the House Friday as part of a $1.7 trillion omnibus spending bill, which now heads to President Joe Biden's desk.
The package, known as SECURE 2.0, combines three bipartisan bills from the House and the Senate and builds off of the SECURE Act, which Congress passed in 2019. In March, House lawmakers overwhelmingly passed the Securing a Strong Retirement Act of 2022, which was introduced by Ways and Means Committee Chairman Richard Neal, D-Mass., and Ranking Member Kevin Brady, R-Texas. The House approved the spending bill in a 225-201 vote.
In a Wednesday press call, Mr. Neal said SECURE 2.0 is "a historic advance on what we were able to do just a few years ago."
SECURE 2.0 includes provisions such as expanding automatic enrollment in 401(k) and 403(b) plans, raising the required minimum distribution age and allowing employees to receive matching contributions to their retirement plans based on qualified student loan payments.
"On behalf of our customers, Fidelity Investments applauds Congress for passing bipartisan legislation that will enhance America's retirement system," said Kevin Barry, Fidelity's president of workplace investing, and Joanna Rotenberg, Fidelity's president of personal investing, in a statement. "SECURE 2.0 will integrate several important benefits that are critical to financial security and expand access to underrepresented communities."
One major provision of the package will allow for employers to match a percentage of employees' student loan payments with contributions to their 401(k) plan, 403(b) plan or SIMPLE IRA. Though student loan matching will be optional for employers, David Stinnett, head of strategic retirement consulting at Vanguard Group, noted that plan sponsors "now have an extra tool or an extra lever to pull" to try to get more participants in their plan.
"I do think that for a lot of young people, I think that it becomes a pretty attractive vehicle," Mr. Neal said Wednesday.
Eric Pan, president and CEO of the Investment Company Institute, commended Congress for its passage of SECURE 2.0 In a statement, he said, "ICI thanks the members of the House and Senate for their commitment to Americans' retirement security. We welcome the passage of this vital piece of bipartisan legislation, which will improve the long-term financial well-being of Americans across the country."
"This is a momentous time for the U.S. retirement industry with two major legislative reform bills being enacted within a three-year span," said Chris Littlefield, president of retirement and income solutions at Principal Financial Group, in a statement. "Just like the first SECURE Act in 2019, SECURE 2.0 will increase the access Americans have to retirement savings and enable more workers to start saving for retirement earlier in their lives."
