Congress has passed the Setting Every Community Up for Retirement Enhancement or SECURE Act as part of its 2020 spending package — providing advisors, the financial services industry and investors with the most significant piece of retirement legislation in a decade.

 “The passage of the SECURE Act is a significant victory for Main Street Americans,” Financial Services Institute President & CEO Dale Brown said in a statement.

Currently, 40% of private-sector workers do not have access to a workplace retirement plan. “The SECURE Act will increase workers' access to retirement savings and allow them to make contributions for as long as they are working. We urge President Trump to sign this legislation into law as quickly as possible,” Brown said.

The bill now goes to President Trump to sign as part of the overall spending bill. Without his signature, the federal government will shut down tomorrow at 11:59 p.m.

“The SECURE Act includes many commonsense reforms that will increase access to workplace retirement plans and expand retirement savings,” said Sangeeta Moorjani, head of Workplace Investing Employer Experience & Retirement Solutions at Fidelity Investments, which manages $8.2 trillion in assets for 30 million individuals and 22,000 businesses.

Of particular importance, Fidelity’s Moorjani said, “the bill eliminates barriers for smaller employers to band together in a multiple employer plan, which will offer a way for millions of small business and self-employed workers to obtain workplace retirement coverage. We are committed to supporting Americans as they save for and live in retirement and will be prepared to help customers understand the enhancements in this new law.”

The legislation should indeed be a boon for advisors and their small business clients who have been sitting on the fence about creating an employee retirement plan. It significantly increases the tax credit for employers who create new plans from the current cap of $500 to a more realistic $5,000. Small employers that implement an automatic enrollment feature in their retirement plan design would also be eligible for an additional $500 credit.

The SECURE Act would also ease the existing rules restricting multiple employer plans (MEPs) to allow two or more unrelated employers to join a pooled employer plan, producing economies of scale that can expand access and lower both employer and plan participant cost.

The legislation also expands opportunities for employers to use annuities in retirement plans, increases the age at which required minimum distributions must be taken from retirement accounts and repeals the age limit for IRA contributors – all of which can help ensure that retirees do not outlive their retirement savings.

The legislation will also:

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