Are Big Changes Coming to Retirement Plans and IRAs?

Posted on: May 23rd, 2019 by Lawrence A. Friedman

Since the enactment of the Employee Retirement Income Security Act of 1974 (ERISA), major changes to the rules governing Individual Retirement Accounts (IRAs) and 401(k) and other retirement plans have been relatively few and far between.  That may be changing soon.


First the Treasury Department announced in March 2019 that employers could offer to buy out long term pension obligations in exchange for lump sum payments.  However, many critics claim the lump sum payments can be far less valuable than the surrendered pensions.


Then just yesterday (May 22, 2019), the House of Representatives did the unimaginable.  It passed a bipartisan bill.  What legislation was so popular it won support from both Democrats and Republicans and generated only 3 no votes (out of 420 votes cast)?  It’s called the Setting Every Community Up for Retirement Enhancement Act abbreviated as the Secure Act.


If enacted the Secure Act would make sweeping changes to annuity rules, benefit distribution options, small business retirement plans, and required minimum distribution calculus as well as other revisions.  So, will the Secure Act become law?  Well, it still must pass the Senate and avoid veto by the president.  However, commentators expect it to be enacted later this year.

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