Here's what could happen to your savings

May 24, 2019, 17:18 UTC / Source: CNBC.com

By Sarah O & # 39; Brien, CNBC

Legislators in the House of Representatives passed a bill to improve the country's retirement savings and make it one step closer to the law.

Called the Secure Act and supported by both Republicans and Democrats, this measure includes various provisions designed to increase the number of savers and their amount.

The changes make it easier for small businesses to group together to offer 401 (k) plans; requiring businesses to allow long-term and part-time workers to become eligible for retirement benefits; and repealing the maximum age for contributions to traditional individual retirement accounts (currently 70 years old).

It would also increase the age when the minimum required distributions, or RMD, of some retirement accounts must start at age 72, from age 70 and up, while making changes to provide more pension to the 401 plans ( k).

"We continue to be optimistic that we will move this bill beyond the goal," said Paul Richman, Head of Political Affairs and Government at the Insured Retirement Institute. "It is likely that before the end of this year, a pension bill will be sent to the office of the president."

A provision that would have allowed to use 529 tax-efficient education savings plans to cover home schooling fees was removed from the Data Protection Act at a vote from the regulatory committee in the House earlier this week.

With the passing of the security act, he will now move to the Senate, where a similar bill has not yet been passed by a committee. In the upper chamber, this act is known as the Retirement Improvement and Retirement Act, and its provisions largely reflect those of the House bill.

However, it does not include some of the Secure Act's proposals, including an increase in the age of MSY and the requirement for companies to provide 401 (k) access to part-time workers. .

RESA's co-sponsor, Chuck Grassley, R-Iowa, told a recent Finance Committee hearing – which he chairs – that he was eager to receive the Senate Security Act and resolve differences between it and the RESA.

Both bills also rely on funding their provisions by amending the rules governing legacy retirement accounts. The House's measure would require most non-client beneficiaries to withdraw the money within 10 years of the original owner's death, while the Senate bill would require a five-year distribution for the value accounts. $ 400,000, unless the beneficiary is the spouse.

At the same time, some lawmakers and Washington insiders first spoke of this legislative effort to address the lack of retirement savings for workers in the country. When the Secure Act was introduced, co-sponsor Richard Neal, D-Mass., Also chair of the House Ways and Means Committee, announced that he would introduce a new set of pension laws more late this year.

Some congressional observers expect it to include a proposal to require companies of a certain size to offer pension plans to their workers. Neal has pursued this approach in previous sessions and should use his strong position to put the issue at the center of his concerns at some point.

A spokesperson for the House Ways and Means Committee told CNBC that Neal hoped to include this provision in a future pension bill, but that the bill was in its infancy.

On the Senate side, another pension bill has recently been added to the composition by Sens. Ben Cardin, D-MD and Rob Portman, R-Ohio. Called the Retirement Security and Savings Act, it provides, among other things, to increase the age of the 75-year-old MRD to 75 and to allow companies to make an equivalent contribution to the worker's retirement account equal to the amount of his student loan.