Secure Act 2.0 heading to the Senate
At the end of March, the House voted 414-5 in favour of the Secure Act 2.0 – a new retirement act which includes provisions to boost the required minimum distribution (RMD) age from 72 to 75 by 2032. Now it must get past the Senate, which could happen later this spring, and be signed off by President Biden.
Participants will be automatically enrolled into the retirement plan when they become eligible, though employees will be able opt out of this coverage. The automatic enrollment amount starts at a minimum 3% of salary but no more than 10%, followed by a 1% increase each year until it reaches 10%. There is an exception to this requirement pertaining to small businesses with 10 or fewer employees, new businesses (those less than three years old), church plans and governmental plans.
Meanwhile, students who are paying off loans will receive help to build up their pension pot and older citizens will have a chance to top up their contributions with in catch-up payments.