Washington insider shares legislative outlook

Photo of Laura Grogan-O’Mara
Laura Grogan‑O’Mara

A Q&A with Laura Grogan‑O’Mara, director, Issues Specialist, Retirement Policy and Planning at Bank of America

It was a busy year in Congress, with ongoing legislative activity and more pending. Staying on top of the ever‑changing legislative and regulatory environment may feel daunting, but we have it covered. As we wrap up the year and head into 2022, Workplace Insights™ met with Laura Grogan‑O’Mara to get insight into what we can expect.

 


Workplace Insights™ (WI): Can you summarize what’s currently going on in Congress?

Laura Grogan‑O’Mara (LGO): The short answer to that question is “a lot.” The longer answer is more complicated. The House of Representatives worked for several months on the Infrastructure Investment and Jobs Act, which President Biden signed into law on November 15, 2021. And on November 19, the House passed the Build Back Better bill, also referred to as the reconciliation bill. Both are lengthy pieces of legislation with well over 1,000 pages a piece. Additionally, Congress must deal with the debt ceiling limit again before the end of the year, as well as a continuation of funding for the government. This makes for a very busy congressional calendar between now and year’s end.


WI: What is the latest with retirement‑related legislation?

LGO: Early versions of the Build Back Better legislation contained notable changes in retirement benefits including a cap on overall retirement savings, restrictions on Roth conversions and a federal mandate that companies with greater than five employees offer automated retirement savings in the workplace. These and other provisions were removed from the bill, but some, including the overall cap on retirement savings accumulations and limitations on Roth conversions, were then added back in to the House-passed version. We could see further changes until such time as the legislation is put to a vote in the Senate.

The reconciliation bill also addresses non‑retirement issues, including expanded tax credits for individuals and businesses and universal family and medical leave, among other items.

The Infrastructure Investment and Jobs Act addresses traditional infrastructure issues, such as funding for roads and bridges, support for transit and rail, improving power and water systems, as well as some additional social infrastructure policy issues like the cost of caregiving. Nothing with real impact to retirement savings or employee plans.

We continue to monitor the progress of legislative proposals and will provide updates as they develop.


WI: Will we begin to see momentum around “SECURE 2.0” or other retirement and benefits policy in 2022?

LGO: Remember the SECURE Act that became law back in December 2019? After the SECURE Act passed, there was bipartisan discussion in Congress discussing what should be in the next retirement legislative package. Since then, there have been several pieces of retirement-related legislation introduced in Congress, but two bills—one in the House and one in the Senate—have been commonly referred to as “SECURE 2.0.”

The House and Senate versions have a great deal in common, but also include some unique elements. The Senate bill is sponsored by Senators Cardin (D‑MD) and Portman (R‑OH) and is called the “Retirement Security and Savings Act.” The House version is sponsored by Representatives Richard Neal (D‑MA) and Kevin Brady (R‑TX) and is titled “Securing a Strong Retirement Act.” Both would provide for accelerated coverage of long‑term, part‑time employees, push the required beginning date of required minimum distributions to age 75, permit student loan payments in lieu of matching contributions to a 401(k) plan, and create a new catch‑up contribution provision, among other popular bipartisan provisions.

With so little time left in 2021, it is more likely that the SECURE 2.0 bills will be revisited in 2022. There continues to be bipartisan support for these proposals in both the House and Senate, and in a mid‑term election year, bipartisan bills have a better chance than other proposals.


WI: This is helpful, thank you Laura. How can clients stay updated and get more information?

LGO: We will continue to keep clients and our Bank of America teams updated as new developments arise. I encourage everyone to join our Legislative and Regulatory Insights webcast on January 12, 1 to 2 p.m. Eastern, for an update on the latest developments. You can register here.