13 Kelly-backed bills included in House-passed SECURE 2.0 retirement package

WASHINGTON, D.C. -- Today, U.S. Rep. Mike Kelly (R-PA) applauded the U.S. House's passage of SECURE 2.0: Securing a Strong Retirement Act, bipartisan legislation that will strengthen Americans' retirement savings. The overall legislation includes thirteen bills and provisions Rep. Kelly either sponsored or co-sponsored. They include:

• Auto-enrollment for new plans
• Expand small business startup credit for employers with up to 50 employees
• Allow 403(b) plans to participate in pooled plans
• Provide small business startup to employers that join an existing pooled plan
• Tax credit for small employers that make military spouses eligible for plan benefits
• Lower capital gains tax on contributions to an employee stock option program (ESOP) by owners of an S-Corporation; elective deferral on up to 10% of gain on ESOP contributions
• Determine when ESOP stock is publicly traded; clarifies rules for considering company stock as "publicly traded" for ESOP purposes, which lowers the cost of establishing and maintaining an ESOP.
• Reduce penalty for failure to take required minimum distributions from 50% to 25%
• Expand IRS Employee Plans Compliance Resolution System
• Expand options for contributions from retirement accounts to charity
• Ensure there is no indefinite statute of limitations for excise tax on excess contributions, prohibited transactions, or required minimum distributions for cases when the taxpayer may not be aware of the violation
• Repayment of birth or adoption distributions
• Limit IRA disqualification penalty to the portion involved in a prohibited transaction

"This is such a critical piece of legislation that ensures hardworking American families and workers have a secure retirement and more money in their pockets during their golden years," Kelly said. "More employees will be able to save by increasing their contributions closer to retirement, and more younger workers will be able to pay off their student loans while also saving for retirements. There is something for everyone in the bill regardless of their profession or chapter in life."

WATCH Rep. Kelly deliver remarks on SECURE 2.0 on the House floor here.

SECURE 2.0 strengthens Americans' retirement savings:

• Helps more Americans save for retirement at all stages of their career
• Makes it easier for small businesses to set up retirement plans for their workers
• Builds on the success of the SECURE Act in 2019, with more than 20 provisions sponsored or co-sponsored by Republicans in stand-alone legislation
• Takes a sensible approach that is bipartisan and revenue-neutral

Here’s how:

• Creates new tax credits to encourage small employers to offer retirement plans. It fully offsets paperwork costs and provides a per-employee credit of up to $1,000 for employer matching contributions.
• Helps employees save for retirement earlier. Employees would be automatically enrolled in their company’s 401(k) plan, while still providing a chance to opt out.
• Americans would have greater flexibility to keep more of their savings for longer. The bill raises the age for required minimum distributions to 75, so individuals don’t have to start withdrawing before they’re ready.
• Helps late career workers catch up in saving for retirement. Late-career workers – who may finally be earning the highest salaries of their careers after spending years at lower wages – can contribute a larger amount to “catch up” on their retirement savings, doubled from $5,000 a year to $10,000 a year.
• Helps lower-income households build their savings with the bigger and simpler Saver’s Credit.
• Support for employees with student loan debt. The bill allows employer matching contributions to a retirement plan for employees that are making payments on student loans.
• Simplifying the way small businesses offer stock ownership to employees. Cuts red tape and offers new tax incentives for small business employee stock ownership plans.
• Prioritizing military families. The bill provides a tax credit for small employers that make plan benefits more available to military spouses (who can be subject to frequent relocation or job changes).

BACKGROUND
SECURE 2.0 is the second piece of a broader retirement savings plan and follows the passage of the SECURE Act in 2019. Rep. Kelly co-authored the bipartisan Retirement Enhancement and Savings Act of 2019, which was enacted in December 2019 as part of the Setting Every Community Up for Retirement Enhancement (SECURE) Act. The SECURE Act aims to encourage employers to adopt new retirement plans, enhances the ability of employees to transfer their retirement plan assets to a new plan when they change jobs, and helps workers to plan and save for their retirement.

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