Washington, D.C.– The bipartisan Retirement Enhancement and Savings Act (RESA) introduced in the House of Representatives this week marks an important step toward helping millions of Americans achieve retirement security.
“This bill represents a grab bag of overdue changes to today’s retirement savings system,” Shai Akabas, director of economic policy at BPC, said. “The reforms would improve retirement security prospects for millions of Americans.”
Rep. Mike Kelly (R-PA) and Rep. Ron Kind (D-WI) are the lead sponsors of the bipartisan effort in the House. The legislation originated in the Senate, where Senate Finance Committee Chairman Orrin Hatch (R-UT) and Sen. Ron Wyden (D-OR), the ranking member, recently reintroduced their bill that was reported unanimously out of committee in 2016.
“Bipartisan efforts like this show a real desire to improve America’s savings and retirement system, which currently leaves far too many people at risk of running out of money during what are supposed to be their golden years,” Akabas said.
Many of the provisions are directly aligned with, or similar to, recommendations of BPC’s Commission on Retirement Security and Personal Savings, co-chaired by former Sen. Kent Conrad and the Honorable James B. Lockhart, III, former director of the Pension Benefit Guaranty Corporation.
In particular, allowing open multiple employer plans is the first step towards a streamlined and more effective system for small businesses to offer their employees low-cost, efficient retirement plans. Tax credits in the legislation would help them do so and incentivize the use of automatic enrollment. Finally, several provisions would encourage plan sponsors to include lifetime income options, as well as ensure that participants are presented with projections of how much monthly income their accumulated savings can provide.