401(k)s & Bipartisanship (Editorial)

As the mercury approaches 100 and with the headlines being what they are, we thought now might be a good time to cool down and discuss a congressional measure that might actually have — gasp! — bipartisan support.

The proposal, the Retirement Enhancement & Savings Act of 2018, seeks to encourage further employee participation in 401(k) and similar plans, the increasingly important vehicles through which people save for retirement. If passed, it would be the biggest change to the plans since 2006, when Congress approved the Pension Protection Act.

In the Senate, the bill is sponsored by Sen. Orrin Hatch, R-Utah, chairman of the Finance Committee, and Sen. Ron Wyden, D-Ore., the ranking member.

“This bill has a good chance of passing because it has strong, bipartisan support,” Michael Kreps, a principal at Groom Law Group in Washington who specializes in retirement law, told the Washington Post.

Among other things, the RESA would:

►  Make it easier for small businesses to band together to offer a multiple-employer 401(k) plan, reducing administrative costs to an individual business by spreading the costs throughout the pool of participants.

►  Extend the age past which employees can contribute to Individual Retirement Accounts past 70½.

►  Allow the purchase of annuities providing lifetime income streams.

Small businesses employ the vast majority of American workers, but they’re also far less likely to have 401(k) or similar retirement plans. Small businesses also drive job growth in the United States. Since the Great Recession’s end, they have created 62 percent of new private-sector jobs, according to the Small Business Administration.

Anything that encourages small companies to offer retirement plans has an outsized effect on employees in this country. And anything that makes it easier for workers to save is a good thing. As is bipartisanship.