Current Legislation That Could Affect Annuities

Annuities, like all options for retirement saving, are subject to complex tax and securities regulations. Here’s a list of bills we’re keeping track of at Annuity Associates:

  • 1770, Retirement Security And Savings Act: S. 1770 would encourage the use of Qualifying Longetivity Annuity Contracts, or QLACs, in certain retirement plans. These annuities help protect seniors who are at risk of outliving their savings. This legislation would also make it easier for annuity holders to partially annuitize and raise the age for required minimum distribution from 72 to 75. This bill recently passed the Senate finance committee unanimously and sponsors Ben Cardin (D-MD) and Rob Portman (R-OH) hope to have it signed into law by the end of this year.
  • R. 2954, Secure A Strong Retirement Act: This bill is largely similar to Senate Bill 1770 mentioned above. Both acts would increase the age for required minimum distribution from 72 to 75, which would make it much easier to include annuities in IRAs and other retirement plans. H.R.2954 would also make it easier for exchange-traded funds, or funds based on a particular stock index, to be included in lists of variable annuities. Once S1770 and HR2954 pass their respective chambers, the bills will be reconciled through a mark-up period. Some version of these bills is likely to be signed into law by the end of the year.
  • 1272, SIMPLE Plan Modernization Act: This bill would encourage small businesses to provide retirement savings plans for their employees and to transition their SIMPLE IRA plans into more traditional 401(K)s. Susan Collins (R-ME) introduced this bill in April, 2021 and it has the co-sponsorship of Mark Warner (D-VA).
  • R. 2951, To Direct The Secretary of The Treasury to Modify Treasury Regulations Relating to Insurance-Dedicated Exchange-Traded Funds: This bill might not have a catchy name, but it would make it easier for lists of variable annuities to include exchange-traded funds. This standalone bill was introduced in the house in April, 2021.
  • 2452, Encouraging Americans To Save Act: This bill seeks to provide more retirement security for low and middle income earners. It offers 50% matching government funds for qualified recipients and the money could be put into an IRA, 401(K), or a 403(B) annuity. This bill was introduced by Ron Wyden (D-OR) and sent to the Senate Finance committee in July 2021, but hasn’t seen any movement since then.
  • R. 5344, PRIA Act of 2021: This bill would establish a portable retirement and investment account, or PRIA, for each individual with a social security number. Bill sponsor James Himes (D-CT) says PRIAs would offer retirement security for part-time workers, gig workers, and workers who spend periods of time outside the workforce due to caregiving responsibilities. This bill is currently in the House Ways And Means Committee.
  • R. 4170, Amend The Code For Marriage Equality Act of 2021: This bill would adjust the language in IRS codes, Social Security laws, and other relevant legislation from “husband” and “wife,” to “spouse.” This bill would help clear some ambiguities in the laws concerning spousal annuity inheritance. It is currently referred to the House Judiciary Committee.

Legislation surrounding annuities is ever-changing. You should contact your financial professional for information on the latest changes.

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