The Retirement Enhancement and Savings Act (RESA) has been reintroduced in the House of Representatives this week. After failing to pass in the 115th Congress, lawmakers are now hoping that refreshed House and Senate floors will support the bill. RESA could provide significant retirement savings benefits to retirees in the coming years if it is passed into law.
Here’s what you need to know about the bipartisan-backed bill.
Retirement Savings Small Changes with Big Benefits
The bill, which has been unsuccessful in Congress in previous years, could make small but highly beneficial changes to the existing retirement savings structure in the United States.
Under the proposed law, retirement Multiple Employer Plans would become more robust with better protections against bad actors.
Under current law, a single employer could invalidate an entire Multiple Employer Plan by violating any of the key requirements. The new law would offer protection for all employers (and their employees) under a shared plan, which could incentivize more small businesses to sign up.
The new law would also enforce annual lifetime income estimates, giving employees a better overview of their retirement savings finances. This change could allow everyday citizens to better plan their retirements, especially when it comes to considering other forms of savings and investments on top of Multiple Employer Plans.
Other benefits of RESA include:
- Strengthened nondiscrimination rules that could encourage more signups.
- Lower costs for pensions under rural electric cooperatives.
- More flexible selection rules for lifetime income providers.
- Financial incentives for small and medium sized businesses that enroll in MEPs.
- Financial incentives for businesses that implement an auto-enrollment system for their employees.
Bipartisan Support for the Bill
Lawmakers will debate the new bill in the House of Representatives this year. With support on both sides of the political spectrum, the current Congress could be the one to finally push this very important bill through to the Senate and eventually into United States law.
Whether you’re just starting in your career, or even if you’re in a job that currently lacks a competitive retirement savings plan, the reintroduction of RESA is good news. It would improve accessibility to competitive retirement plans, helping to remove stagnation from an area of the economy where legislation is desperately needed to drive change and innovation.
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