On December ­­­19, 2019, the U.S. Senate approved H.R. 1865, a massive appropriations bill funding most of the federal government’s domestic programs for the remainder of the fiscal year which began on October 1. President Trump is expected to sign the bill.

This “must-pass” bill provided the vehicle for advancing the Setting Every Community up for Retirement Enhancement Act of 2019, known as the SECURE Act, which passed the House with overwhelming bipartisan support in May, but had been stalled in the Senate since.

Though the SECURE Act is largely aimed at increasing access to employer-sponsored retirement plans in the private sector, the bill does include some provisions that will affect governmental defined contribution plans:

  • Sec. 114 will increase the age for beginning RMDs to age 72.
  • Sec. 109 will allow participants to take a distribution of a lifetime income investment and roll it into another plan, without the usual withdrawal restrictions, if their plan no longer offers that investment option.
  • Sec. 113 will permit “qualified birth or adoption distributions” from a retirement plan, with certain conditions.
  • Sec. 401 will require distribution of inherited account assets within ten years of the death of the account owner, with a few exceptions. If enacted, these changes would raise around $15 billion in revenue over ten years. For governmental plans, the new rules would apply after December 31, 2021.

NAGDCA supported the enactment of the SECURE Act and looks forward to working with Members of Congress to craft another bipartisan, bicameral bill which would incorporate NAGDCA legislative priorities and to make additional improvements to the Nation’s retirement system.

The text of H.R. 1865 (prior to the inclusion of an amendment on tax extenders) can be accessed here. The SECURE Act was designated as Division O, beginning on p. 1532.