Session Expiration Warning
Pending Legislation: Summer 2013
Three bills that were originally introduced in the last session of Congress have been re-introduced within the last few months and might make an impact this time around, although it is uncertain whether they will pass in their current form.
The Retirement Plan Simplification and Enhancement Act of 2013 [see "Annuities" section, below] from Rep. Neal (D-MA) boasts a variety of reform measures,
- An extension of the time to adopt a qualified retirement plan up until the due date of tax filings for the year.
- Establishment of an additional automatic enrollment safe harbor that would feature a 6% minimum default contribution.
- An increase in the portability of in-plan lifetime income options.
- An exception from the required minimum distribution (RMD) rules when a retiree's savings do not exceed $100,000.
The Automatic IRA Act of 2013 [see "IRAs"] from Rep. Neal would require employers (with more than 10 employees) who do not maintain a qualified retirement plan to enroll their workers in IRAs via an automatic payroll deduction arrangement. The Lifetime Income Disclosure Act [see "Annuities"] from Rep. Holt (D-NJ) would require plan sponsors of defined contribution plans to inform plan participants, on an annual basis, of the projected monthly income they could anticipate receiving if they took distributions as annuities (based on the amount of money in their accounts).
The Department of Labor (DOL) has chimed in on the topic of lifetime income through its May release of an advance notice of proposed rulemaking (ANPRM) on lifetime income illustrations on participant benefit statements. The ANPRM outlines the basis for a future proposed regulation that would require disclosure on participant statements of lifetime benefit projections at retirement based on both current and projected account balances. [For more information on the ANPRM, go to invesco.com/WI-Summer-2013
for Invesco's "Washington Insight" on this topic]. Elsewhere on the regulatory front, the DOL's definition of "fiduciary" as it applies to providers of investment advice to retirement plans, anticipated in July, will likely be pushed back to the fall amid concerns [as expressed in a draft discussion bill from Rep. Wagner (R-MO)] that the DOL must harmonize the fiduciary definition with the Securities and Exchange Commission's (SEC's) work on a uniform fiduciary standard.
The following represent bills that are actively being considered by Congress at this time. For more information on these and other bills, go to the Library of Congress website at
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