Slack adoption of annuities in 401(k) plans has been attributed, in part, to employers' fears of liability if insurers prove unable to meet annuity contractual obligations.
On Thursday, the Family Savings Act passed out of the U.S. House of Representatives by a 240 to 177 vote, with 10 Democrats voting with Republicans to advance the bill.
The legislation would relax existing regulatory guidance on employer participation in Multiple Employer Plans by allowing non-related employers to pool workers under one defined contribution plan.
One of three bills packaged under Tax Reform 2.0, the Family Savings Act originally included 17 provisions that, along with removing the employer commonality requirement for participation in MEPs, would relax restrictions on contributions and mandatory withdrawals from IRAs, and create Universal Savings Accounts, which would allow after tax contributions up to $2,500 annually to grow tax free.
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Nick Thornton
Nick Thornton is a financial writer covering retirement and health care issues for BenefitsPRO and ALM Media. He greatly enjoys learning from the vast minds in the legal, academic, advisory and money management communities when covering the retirement space. He's also written on international marketing trends, financial institution risk management, defense and energy issues, the restaurant industry in New York City, surfing, cigars, rum, travel, and fishing. When not writing, he's pushing into some land or water.
