Legislation that could affect how millions of Americans save for retirement and how they cash out those nest eggs in their golden years has attracted interest in both the House and the Senate, The Washington Post reports.
The proposed legislation, known as the Retirement Enhancement and Savings Act, could add millions of people to the rolls of tax-deferred retirement accounts by juicing incentives for employers and workers to participate.
“With thousands of people retiring every day, there is a need for increasing retirement savings and putting less pressure on government programs,” says Jeanne de Cervens, vice president and director of federal government affairs at Transamerica.
The incentives would make it easier for small companies to pool together to reduce the costs of maintaining retirement plans. They would also extend the age at which people can contribute to Individual Retirement Accounts beyond 70½. The purchase of annuities, which are attractive because of their lifetime income streams, would also be allowed.
The bipartisan Senate bill is sponsored by the heads of the Finance Committee, Sens. Orrin G. Hatch (R-Utah) and Ron Wyden (D-Ore.). That version includes a tax credit to incentivize automatic enrollment and provisions aimed at establishing more flexible multi-employer plans.
In the House, Ways and Means Chairman Kevin Brady (R-Tex) has indicated he intends to include retirement account provisions in a “Tax Reform 2.0” package expected to reach the floor this fall.
It’s not yet clear what will be included in Brady’s package, and the fate of the legislative efforts is uncertain in an election year.
