President Donald Trump has signed the federal government appropriations bill for fiscal year 2020, which includes the Secure Act, according to news reports.
The Secure Act — or the Setting Every Community Up for Retirement Enhancement Act — is aimed at strengthening Americans’ retirement security through measures such as allowing smaller firms to participate in “pooled employer plans.”
Leaders of the House of Representatives and Senate agreed to include the Secure Act in the appropriations bill on Tuesday, with the house passing the entire package the same day and the Senate following Thursday, as reported by FA-IQ.
Trump signed the bill Friday, according to MarketWatch.
The Secure Act includes other provisions, such as raising the age for contributions to IRAs and required minimum distributions, lowering the number of hours long-term employees must work to be eligible for their company’s pension plan and expanding access to lifetime income products within retirement plans.
Under the act, the RMD age has been raised to 72 from 70 1/2.
Supporters of the act, which include the Insured Retirement Institute and Fidelity Investments, say it will boost access to workplace retirement plans and expand retirement savings.
Some industry experts, however, doubt the Secure Act’s ability to achieve its stated goals. Alicia Munnell, director of the Center for Retirement Research at Boston College, tells MarketWatch “the changes in the act are really quite modest.”
Jamie Hopkins, director of retirement research at Carson Wealth, wrote in a column in Forbes that a provision in the act removing the required minimum distribution provisions for so-called stretch individual retirement accounts “will cause chaos” for several types of trusts. Stretch IRAs extend the tax-deferred status of inherited IRAs when passed to non-spouse beneficiaries.
Other critics have argued the inclusion of annuities in 401(k) plans is a win for the insurance industry but could cost employees if the products are selected incorrectly, according to MarketWatch.