The most comprehensive changes to private retirement plans in more than a decade are gaining momentum in Congress.
A key House committee on Tuesday unanimously passed a bill intended to increase the flexibility of 401(k) plans and improve access to the accounts, particularly for small businesses and their employees.
The proposal, known as the Secure Act, was backed by the top Democrat and Republican on the tax-writing Ways and Means committee.
The bill includes:
- A host of provisions aimed at encouraging small businesses to provide private retirement benefits to their workers.
- It allows them to band together to offer 401(k)s and creates a new tax credit of up to $500 for companies that set up plans with automatic enrollment.
- Businesses with long-term, part-time workers must also allow them to become eligible for retirement benefits.
Several measures that would affect other types of savings are included in the bill.
- It repeals the maximum age for IRA contributions and raises the age for required mandatory distributions from 70½ to 72.
- It also expands the use of 529 plans, from only college-related expenses to include home schools and student loans.