The $1.3 trillion omnibus spending bill that was recently passed by Congress, unfortunately, allocated nothing for retirement provisions.  The Retirement Enhancement and Savings Act (RESA) was not included in the final draft of the spending bill, although industry supporters hoped it would be included. RESA offered a wide-ranging bipartisan package of reforms that actually passed the Senate Finance Committee in 2016. The bill was revived in the Senate in March 2018. Opposition to it came from the House because there wasn’t time for Representatives to offer their own changes to the bill before the spending bill was passed.

If eventually approved, RESA will not only make some improvements to the current system, but it may also provide access to workers who may not currently contribute to an employer-sponsored retirement plan. According to an article from The Hill, RESA passed on a bipartisan, unanimous basis by the Senate Finance Committee in 2016. It is designed to not only help Americans boost their savings but also provide a means to secure retirement income for life to supplement Social Security.

The reforms encourage retirement plan creation and increased savings at small businesses. This is absolutely vital since employees at the nation’s largest firms are much more likely to have access to a 401(k) plan than employees at small firms. According to the U.S. Census Bureau, the U.S. currently has 27.9 million small businesses versus only 18,500 companies with more than 500 employees.

One provision encourages small employers not yet prepared to sponsor their own retirement plans to join an “Open MEP,” a multi-employer plan, to achieve economies of scale and to share the costs associated with plan administration.

Fortunately, some provisions in RESA have been picked up in stand-alone bills, including offering nondiscrimination relief to closed pension plans, allowing multiple employer plans, and encouraging lifetime income options, i.e. annuities—the only product that can guarantee a lifetime stream of retirement income.

Much more needs to be done to help our workers save and prepare for a retirement. Getting RESA passed and funded is a good start.