In the article “Reish Says SECURE 2.0 Likely to be Law by End of 2021: Broadridge Fi360 Conference,”401(k) Specialist shared insights from benefits and executive compensation partner Fred Reish on the proposed retirement reform legislation known as SECURE 2.0 currently making its way through Capitol Hill.
In Reish’s session at the 2021 Broadridge Fi360 Solutions Annual Conference, titled “Legislation, Regulation, Litigation, Examination: An Update About Retirement Issues,” he said, “Retirement plan legislation is one of the few areas where the legislation is for the most part — and has been — bipartisan. So, we’re going to get retirement plan legislation.”
“This thing has legs,” Reish noted. “I think within a matter of months, it will be passed out of the House, and it’ll go over to the Senate; it has a lot of support there. It may get modified some, but I would say somewhere between October and December of this year, SECURE Act 2.0 will become the law.”
Reish added, “Keep in mind this bill has a real chance, a very high probability of being enacted this year. So, pay attention to it because it could create opportunities for you and your plan sponsor clients.”
Reish also explained the importance of how the legislation will encourage more small businesses to offer retirement plans. “If you work with startup plans, you really need to know about this. There is a really dramatic, significant increase in the tax credit of small plan startup costs,” he said.
For example, Reish cited a company that has up to 50 employees starting a plan that could get 100% of the administrative costs covered up to $5,000 per year for three years.
“That’s significant. But it goes beyond that,” Reish continued. For employer contributions to these startup plans, they will credit the employer with up to $1,000 per participant for the first couple years and then a slightly reduced amount for the next three years.
“If you are in the startup plan market, this is a huge deal. It’s basically going to make the plan free for the first few years and very inexpensive for the next couple of years after that,” Reish said.
Beyond legislation, Reish discussed Department of Labor and SEC regulation and enforcement issues, including the expanded definition of fiduciary advice, lifetime income illustrations and how to help plan sponsors answer inevitable participant questions about them, lawsuits and cybersecurity.