Pub. 10 2020-2021 Issue 6

O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S — H E L P I N G C O L O R A D A N S R E A L I Z E D R E A M S www.coloradobankers.org 8 D espite political partisanship that has marked much of the 116th Congress in 2019 and 2020, there have been some notable exceptions with bipartisan outcomes. The Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019 proved that cooperation is possible. That legislation, enacted in December 2019, made significant enhancements to tax-advantaged sav- ings arrangements. The enactment of the Coronavirus Aid, Relief, and Economic Security (CARES) Act in March 2020 was a unified response to the pandemic that has disrupted many Americans’ lives in both economic and health terms. In De- cember 2020, Congress was able to put aside differences in crafting legislation combining additional pandemic relief with needed last-minute federal agency appropriations. What 2021 will bring is yet to be determined. The Democratic major- ity in the House of Representatives narrowed in the 2020 general election, and control of the U.S. Senate shifted to Democratic control by the narrowest of margins. A Democrat also now resides in the White House. His legislative agenda has yet to be revealed in detail but — based on campaign messaging — may include the broadly defined goal of “equalizing benefits across the income scale.” This ambition aside, it can be difficult for any president to accomplish legislative objectives with such a nar- rowly divided Congress. Unless, that is, these objectives align with those of a majority of law- makers. Fortunately, tax-advantaged savings legislation has a history of being able to gather bipartisan support. It has win-win dimensions that tend to unify rather than divide. For this rea- son, there is optimism that one or more savings-focused bills could be enacted in 2021. Several introduced during the past two years will likely be re-intro- duced in the 117th Congress. Securing a Strong Retirement Act This legislation — called SECURE 2.0 by some, referring to 2019’s SE - CURE legislation — is a further ex - ample of bipartisanship. It is jointly sponsored by House Ways and Means Committee Chairman, Representative (Rep.) Richard Neal (D-MA) — and GOP Ranking Member Kevin Brady (R-TX). Due to the prominence of these sponsors, the legislation is considered to have favorable prospects. It includes the following provisions: • Require employers — with excep - tions for certain new and small busi- nesses — to establish an automatic enrollment deferral-type retirement plan, such as a savings incentive match plan for employees of small employers (SIMPLE) IRA plan. • Provide an enhanced small em- ployer plan startup tax credit for such new plans. • Enhance the “saver’s credit” for IRA contributions and defer- ral-type employer plan contri- butions, such as those made to a SIMPLE IRA plan. • Exempt up to $100,000 of accu- mulated IRA and employer-spon- sored retirement plan assets from required minimum distribution (RMD) calculations. • Increase the RMD onset age from 72 to 75. FEATURE ARTICLE 2021 Could See More Retirement and Health Legislation BY MIKE RAHN, CISP