New bipartisan Senate legislation aims to encourage more small-business retirement plans by expanding the availability of pooled employer plans (PEPs) to 403(b) plans and extending the small-employer start-up tax credit for new plans to employers that join an existing PEP or multiple-employer plan (MEP), regardless of when they join. The bill also provides a penalty-free grace period to correct reasonable errors in administering automatic enrollment and automatic escalation features and allows certain retroactive plan amendments to boost benefits.
The Improving Access to Retirement Savings Act, introduced on May 19 by Sens. Chuck Grassley, R-IA, Maggie Hassan, D-NH, and James Lankford, R-OK, will “build off the successful implementation of the SECURE Act,” the lawmakers said in a press release announcing the legislation, which they first offered in the prior Congress. The Senate bill’s provisions are also included in a much larger bipartisan House package of retirement reforms — the Securing a Strong Retirement Act of 2021 (HR 2954) — that unanimously passed the Ways and Means Committee earlier this month.
The three senators sit on the Senate Finance Committee, which is expected to consider a similarly broad retirement package this year — the Retirement Security and Savings Act (RSSA), introduced on May 21. Although unlikely to move forward in a stand-alone measure, the reforms in the smaller bill have an excellent chance of getting folded into RSSA and included in any final legislation Congress might pass.
Two provisions in the bill aim to encourage PEPs:
The bill’s other provisions would ease plan administration in two ways for employers of all sizes: