In the interest of helping the millions of Americans who struggle with saving adequately for retirement, a bipartisan group of members of the United States House of Representatives recently proposed the Securing a Strong Retirement Act of 2020.
Securing a Strong Retirement Act of 2020
The legislation proposes a wide variety of reforms, including:
- Expanding automatic retirement plan enrollment
- Creating financial incentives for small businesses to offer retirement plans
- Increasing and modernizing the current IRA contribution credit
- Increasing the required minimum distribution age to 75
- Allowing individuals to have student loan payments matched in their retirement accounts by their employers.
One especially interesting component of the Act is the creation of a “Lost and Found,” a database of lost pension and retirement plan accounts. The Pension Benefit Guaranty Corporation would administer this registry, working with both employers and participants to reconnect them when one loses track of the other. In 2015 alone, Americans lost more than $7.7 billion in retirement savings to lost or forgotten accounts, making this a crucially important provision for retirees.
Another provision of interest is a section that specifically addresses the issue of recoupment. When a participant is overpaid a benefit, there is ambiguity about whether plan administrators are obligated as fiduciaries to “recoup” that benefit from the participant. The Act would strictly limit the ability of plans to recoup from participants by placing a cap on the total amount that can be recouped, preventing the charging of interest on outstanding amounts and forbidding the use of collection agencies to retrieve overpayments. This clarity would be extremely useful for participants who are unknowingly paid benefits in excess of what they are owed because the law currently allows them to be hit with a one-two punch — a reduction of benefits and a bill for the overpayment.
We can help with your pension and retirement questions
Do you have questions about your retirement plan or pension? The Upper Midwest Pension Rights Project may be able to help. We provide no-cost legal services and advice for retirement savings and pension plan issues. Contact us at 1-866-783-5021 or pensions@trellisconnects.org.
Disclaimer: This blog is not legal advice but contains general information not applicable to specific matters. No attorney-client relationship is formed by access to this information.
