• Home
  • Opinion
  • Quizzes
  • Redistricting
  • Sections
  • About Us
  • Voting
  • Events
  • Civic Ed
  • Campaign Finance
  • Directory
  • Election Dissection
  • Fact Check
  • Glossary
  • Independent Voter News
  • News
  • Analysis
  • Subscriptions
  • Log in
Leveraging Our Differences
  • news & opinion
    • Big Picture
      • Civic Ed
      • Ethics
      • Leadership
      • Leveraging big ideas
      • Media
    • Business & Democracy
      • Corporate Responsibility
      • Impact Investment
      • Innovation & Incubation
      • Small Businesses
      • Stakeholder Capitalism
    • Elections
      • Campaign Finance
      • Independent Voter News
      • Redistricting
      • Voting
    • Government
      • Balance of Power
      • Budgeting
      • Congress
      • Judicial
      • Local
      • State
      • White House
    • Justice
      • Accountability
      • Anti-corruption
      • Budget equity
    • Columns
      • Beyond Right and Left
      • Civic Soul
      • Congress at a Crossroads
      • Cross-Partisan Visions
      • Democracy Pie
      • Our Freedom
  • Pop Culture
      • American Heroes
      • Ask Joe
      • Celebrity News
      • Comedy
      • Dance, Theatre & Film
      • Diversity, Inclusion & Belonging
      • Faithful & Mindful Living
      • Music, Poetry & Arts
      • Sports
      • Technology
      • Your Take
      • American Heroes
      • Ask Joe
      • Celebrity News
      • Comedy
      • Dance, Theatre & Film
      • Diversity, Inclusion & Belonging
      • Faithful & Mindful Living
      • Music, Poetry & Arts
      • Sports
      • Technology
      • Your Take
  • events
  • About
      • Mission
      • Advisory Board
      • Staff
      • Contact Us
Sign Up
  1. Home>
  2. bipartisanship>

Congress shows signs of bipartisanship with retirement benefits bill

Mario H. Lopez
https://twitter.com/mariohlopez?lang=en
May 13, 2022
401k statement
DNY59/Getty Images

Lopez is president of the Hispanic Leadership Fund, a nonpartisan public policy advocacy organization that advances liberty, opportunity and prosperity for all.

With financial insecurity looming in the consciousness of millions of Americans, it was encouraging to see the U.S. House of Representatives recently passed legislation that strengthens and expands opportunities for those who participate in private retirement plans through their employer. Tens of millions of Americans stand to benefit from potential changes in the law.

The Securing a Strong Retirement Act, often referred to as SECURE 2.0, passed the chamber with overwhelming bipartisan support (by a vote of 414-5) — which is in and of itself eyebrow-raising these days.


The bill includes a series of critical changes that will help small businesses and their employees, lower- and middle-income families, and anyone attempting to save and improve their economic outlook.

One of the most important provisions of SECURE 2.0 is enhancement of the Saver’s Credit, a tax credit available to low- and moderate-income workers who make contributions out of their salary to their employer-sponsored 401(k), 403(b), SIMPLE, SEP or governmental 457 plan, or who contribute to traditional or Roth IRAs.

Under current law, the credit percentage — which is multiplied by the contribution (up to the maximum contribution of $2,000) — is 50 percent, 20 percent, 10 percent or zero, based on the taxpayer’s modified adjusted gross income. SECURE 2.0 eliminates the MAGI tiers and makes the credit percentage 50 percent for all who don’t surpass the upper-income threshold. For example, if a married couple has $48,000 of income, and one of them makes a $2,000 contribution to a plan or IRA, the current credit of 10 percent equals a $200 tax credit. Under SECURE 2.0, that same couple would receive a 50 percent credit — $1,000.

Sign up for The Fulcrum newsletter

SECURE 2.0 also incentivizes small businesses to offer retirement plans, an employee benefit that is often difficult for small businesses to establish.The three-year small-business start-up credit is currently 50 percent of administrative costs, up to an annual cap that can be as much as $5,000. If a company with up to 100 employees starts a retirement plan and spends $3,000 per year administering it, the employer currently receives a $1,500 per year credit for three years. Under SECURE 2.0, that 50 percent credit would increase to 100 percent for employers with up to 50 employees, going from $1,500 to $3,000 in this example.

To illustrate the power of the additional credit based on contributions, assume that a 40-employee company makes $500 contributions for each of its employees. The contribution-based credit for that company over five years would total $70,000 — $20,000 in each of the first two years, $15,000 in the third year, $10,000 in the fourth and $5,000 in the fifth. This is a powerful incentive that helps both the small business itself and of course its employees.

SECURE 2.0 allows student loan payments to be treated as elective deferrals for purposes of matching contributions. Under the bill, an employer would be permitted to make matching student loan contributions under 401(k) and 403(b) plans. This addresses a problem facing millions of employees who are so buried in student debt that they cannot afford to make retirement contributions and thus lose out on matching contributions offered by their employer. For example, if an employer provides a 50 percent match and an employee makes student loan payments of $1,000, the employer would make a $500 contribution to the plan on behalf of that employee.

There are a whole host of other provisions. For example, the bill would help part-time employees become eligible to participate in their employer’s retirement plan, addressing a key concern under today’s rules. Also, the bill would help our nation’s military spouses become covered by retirement plans despite having to move so much to support their spouses. And the bill establishes a lost-and-found registry to help individuals find retirement benefits that they have earned but lost track of.

With bipartisan cooperation toward solving problems seeming impossible to find, the SECURE 2.0 bill represents important progress that benefits working families across the country. The Senate has its own version making its way through the legislative process. Those following these bills closely expect that these bills will be combined and probably included in a broader legislative package.

Regardless of how it comes to be, let’s hope that lawmakers continue to work together on such a critical issue as financial empowerment for everyday Americans.

From Your Site Articles
  • Officials scored on efforts to find common ground - The Fulcrum ›
  • House committee approves ideas for civility, collaboration - The ... ›
  • Younger House members prove to be a bit more bipartisan - The ... ›
  • Proof that bipartisanship exists in Congress - The Fulcrum ›
Related Articles Around the Web
  • Retirement savers may benefit from Secure 2.0. What needs working ... ›
  • House passes 'Secure Act 2.0.' Here's what it means for retirement ›
  • What Is SECURE Act 2.0? How Would It Change Retirement ... ›
  • SECURE Act 2.0: 14 Ways the Proposed Law Could Change ... ›
bipartisanship

Join an Upcoming Event

Middle Class and Affordable Housing

The Great Reset
May 09, 2023 at 6:00 pm CDT
Read More
View All Events

Want to write
for The Fulcrum?

If you have something to say about ways to protect or repair our American democracy, we want to hear from you.

Submit
Get some Leverage Sign up for The Fulcrum Newsletter
Follow
Contributors

Reform in 2023: Leadership worth celebrating

Layla Zaidane

Two technology balancing acts

Dave Anderson

Reform in 2023: It’s time for the civil rights community to embrace independent voters

Jeremy Gruber

Congress’ fix to presidential votes lights the way for broader election reform

Kevin Johnson

Democrats and Republicans want the status quo, but we need to move Forward

Christine Todd Whitman

Reform in 2023: Building a beacon of hope in Boston

Henry Santana
Jerren Chang
latest News

Ron DeSantis and the rise of political racism

Lawrence Goldstone
18h

Curriculum regulations and book bans: Modern day anti-literacy laws?

Katherine Kapustka
18h

Podcast: 2024 Senate: Democrats have a lot of defending to do

Our Staff
18h

Podcast: Collage: The promise of Black History Month

Our Staff
01 February

Steward leadership

David L. Nevins
01 February

Sharing a common fate

Kevin Frazier
01 February
Videos

Video: The Supreme Court and originalism

Our Staff

Video: How the baby boom changed American politics

Our Staff

Video: What the speakership election tells us about the 118th Congress webinar

Our Staff

Video: We need more bipartisan commitment to democracy: Pennsylvania governor

Our Staff

Video: Meet the citizen activists championing primary reform

Our Staff

Video: Veterans for Political Innovation - Who we are

Our Staff
Podcasts

Podcast: 2024 Senate: Democrats have a lot of defending to do

Our Staff
18h

Podcast: Collage: The promise of Black History Month

Our Staff
01 February

Podcast: Separating news from noise

Our Staff
30 January

Podcast: Deepening democracy in the states

Our Staff
27 January
Recommended
Ron DeSantis and the rise of political racism

Ron DeSantis and the rise of political racism

Big Picture
Curriculum regulations and book bans: Modern day anti-literacy laws?

Curriculum regulations and book bans: Modern day anti-literacy laws?

Big Picture
Podcast: 2024 Senate: Democrats have a lot of defending to do

Podcast: 2024 Senate: Democrats have a lot of defending to do

Podcasts
Video: The Supreme Court and originalism

Video: The Supreme Court and originalism

Justice
Podcast: Collage: The promise of Black History Month

Podcast: Collage: The promise of Black History Month

Podcasts
Steward leadership

Steward leadership

Big Picture