Hill Action Affects Retirement Plans
Congress is expected to wrap up its business for the summer in the next two weeks as members continue to work through an extremely limited set of issues in which the two parties can find common ground in this election year.
The first of those issues to address is transportation infrastructure funding. During the week of July 14, the House of Representatives easily passed their version of legislation
that would extend the authorization of the Highway Trust Fund and fix its funding shortfall until May 2015. The measure is now pending in the Senate, where it is expected to be taken up before Congress’ summer break.
The House version got a political boost when the Obama administration formally supported the House approach
. Thus, it is looking increasingly likely that the House bill, with its extension of MAP-21 interest stabilization, will clear the Senate without amendment and head to the president’s desk for his signature.
The House of Representatives also passed two other pieces of retirement-related legislation during the week of July 14:
- The House approved the Smart Savings Act, which would change the default fund for new enrollees in the Thrift Savings Plan, the defined contribution retirement plan for federal employees. Money in the current default fund, called the Government Securities Investment Fund, or “G Fund,” is invested in a nonmarketable U.S. Treasury security backed by the U.S. government. Money in the new default fund, called the Lifecycle Fund or “L Fund,” is invested in assets tailored to meet investment objectives based on various time horizons, in a way xthat is similar to target date funds. This non-controversial legislation, which is also supported by the Federal Retirement Thrift Investment Board (the entity that administers the Thrift Savings Plan), is expected to clear the Senate and be signed into law by the president.
- The House continued to act on a series of tax bills that would permanently extend some expired individual tax provisions — the so-called tax extender provisions — contained in the Internal Revenue Code. In the latest effort, House Republicans combined five bills that already cleared the House Ways & Means Committee into one charitable giving package. The package includes a permanent extension of the IRA charitable rollover provision that allows certain tax-free distributions from IRAs for charitable purposes. Like the other bills addressing individual tax extenders on a permanent basis that passed the House, it is unlikely that this bill will be taken up by the Senate; furthermore, the White House has threatened to veto the measure.
Andrew Remo is ASPPA’s Congressional Affairs Manager.