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PSCA Executive Reports

March 29, 2018

Retirement Enhancement and Savings Act

In early March, Senate Finance Committee Chairman Orrin Hatch (R-UT) and Ranking Member Ron Wyden (D-OR) introduced the Retirement Enhancement and Savings Act of 2018 (S. 2526). The bill is nearly identical to its 2016 counterpart and includes, among other things, provisions which:  

  • Allow unrelated businesses to participate in a single defined contribution “pooled employer plan” (i.e., open multiple employer plans);
  • Allow for a fiduciary safe harbor for the provision of certain lifetime income options;
  • Mandate the disclosure of a lifetime income value (e.g., the monthly amount of income one can expect to receive in retirement based on the value of one’s account) on participants’ annual statements; and
  • Expand the tax credit for small businesses starting plans.

Drafters updated certain dates and made a minor change to the fiduciary safe harbor for the selection of annuity providers. They also removed four provisions that were enacted as part of tax reform and the February budget bill. Specifically, the deleted sections - previously numbered 110, 111, 402, and 506 – related to extended rollover periods for plan loan offset amounts; the modification of rules relating to hardship withdrawals from cash or deferred arrangements; the treatment of qualified equity grants; and the repeal of technical termination partnerships. A plan sponsor’s guide to RESA may be found here

Supporters had been hopeful RESA would be included in this month’s omnibus funding bill, but the text was not included. Advocates hope it may still be passed in the coming weeks or as part of budget/spending bills for the fiscal year starting October 1st, 2018, or in a lame duck session after the 2018 mid-term elections.

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