Infrastructure Investment Bonds Legislation Introduced

Senators Roger Wicker (R-MS) and Michael Bennet (D-CO) introduced the American Infrastructure Bonds Act last week. The bill creates a new American Infrastructure Bond to help municipalities raise capital to fund infrastructure projects. In a press statement, Senator Wicker said, “This legislation would improve upon previous efforts to expand investment in the state and local bond market by increasing flexibility for communities and adding assurances for bondholders. As our nation looks to invest in public works, now is the right time for Congress to allow state and local governments to seize this opportunity and renew infrastructure across the nation.” Senate Bennet also noted the benefit of the bill, stating, “This bipartisan proposal builds on a proven and successful model for drawing investment in our infrastructure – from our roads and bridges to our water systems and broadband. The American Infrastructure Bonds Act would help state and local leaders finance the much-needed projects that are critical to building stronger and more resilient communities.”

Before introduction, IRI submitted a letter supporting the bill to the sponsors. In the letter, IRI highlighted that the legislation presents to the life insurance industry “an opportunity to invest its capital in financing infrastructure projects and help to revitalize and strengthen our nation’s economy.” In a press statement issued by IRI, Chief Government and Political Affairs Officer Paul Richman said, “Advocating for an innovative infrastructure financing mechanism is among IRI’s priority issues included in our 2021 Federal Retirement Security Blueprint. We are encouraged to see the American Infrastructure Bonds Act of 2021 introduced, and we welcome the opportunity to work with the sponsors to advance this legislation.”

Similar legislation, the Local Infrastructure Financing Tools (LIFT) Act, was introduced in the House by Representative Terri Sewell (D-AL). The LIFT Act also received IRI’s support.

Any questions should be referred to John Jennings.


House of Representatives Passes Two IRI Blueprint Proposals

Two IRI-supported bills passed out of the House of Representatives last week. H.R. 1996, the Secure And Fair Enforcement (SAFE) Banking Act, was passed by the House by a bipartisan vote of 321 to 101. The bill, sponsored by Representatives Ed Perlmutter (D-CO), Steve Stivers (R-OH), Nydia Velazquez (D-NY), and Warren Davidson (R-OH), provides protection and insulation from liability to both participants and institutions offering and administering retirement plans or individual retirement accounts for the employees of cannabis companies and associated businesses regulated and licensed by a state. Before the vote, IRI submitted a letter supporting the bill to the sponsors of the SAFE Banking Act, noting IRI’s call for the bill’s enactment in the 2021 Federal Retirement Security Blueprint.

H.R. 1565, the Senior Security Act, also received bipartisan support – passing by a vote of 355 to 69. The bill, sponsored by Representatives Josh Gottheimer (D-NJ) and Trey Hollingsworth (R-IN), creates an interdivisional task force at the Securities and Exchange Commission (SEC) to examine and report to Congress on the challenges still facing older and vulnerable investors, including financial exploitation and the impacts of cognitive decline. The bill also directs the Government Accountability Office to report on the economic effects of the financial exploitation of older Americans, including associated governmental/private sector costs, numbers of unreported cases, and policy recommendations to respond to this critical issue. IRI sent a letter supporting the bill to the sponsors earlier this year. In the 2021 Federal Retirement Security Blueprint, IRI called for enacting legislation to increase the safeguards protecting older and vulnerable investors.

IRI will continue to monitor Congress for action on IRI Blueprint proposals.

Any questions should be referred to John Jennings.

Military Spouse Retirement Security Bill Introduced by Bipartisan Group of Senators

The Military Spouse Retirement Security Act of 2021 was introduced last week by Senators Michael Bennet (D-CO), Susan Collins (R-ME), Maggie Hassan (D-NH), and James Lankford (R-OK). The bill expands retirement savings opportunities to the spouses of military service members by encouraging small business owners to enroll qualifying employees into workplace retirement plans within two months of their hiring. The bill also increases the savings rate for qualified employees by requiring that they be made eligible for any matching or non-elective contributions like those available to employees with two or more years of employment.

In a press statement, Senator Bennet said, “Every American should be able to save for their future, especially our military spouses who make difficult professional decisions to support their loved ones who serve.” Senator Collins echoed this, stating, “By encouraging small employers to provide military spouses with accelerated access to retirement plans, employer contributions, and vesting, our bipartisan bill would help to strengthen the financial security of these unsung heroes of our country’s national defense.”

In a letter of support transmitted to the bill’s sponsors, IRI stated, “IRI has long-supported increasing access to employer-sponsored retirement plans for both full and part-time workers […] This is particularly important for military spouses who are required to move from post to post when their duty stations change and with those relocations, they also change jobs, making it more challenging for a military spouse to participate in a workplace plan and accumulate savings for retirement. Encouraging employers to offer military spouses’ access to an employer-sponsored retirement savings account will go a long way towards helping ensure military spouses are provided with more opportunities to build a retirement nest-egg.” The letter also noted the bill’s inclusion in the 2021 Federal Retirement Security Blueprint as a priority for IRI.

IRI also submitted a letter of support to Representatives Jason Crow (D-CO) and Brad Wenstrup (R-OH), who introduced a version of the bill in the House of Representatives.  

IRI will continue to monitor Congress for any actions to improve retirement security for military spouses.

Any questions should be referred to John Jennings.

Collins and Warner Introduce Legislation to Enhance SIMPLE Plans

In the SIMPLE Plan Modernization Act introduced last week, Senators Susan Collins (R-ME) and Mark Warner (D-VA) are looking to provide “greater flexibility and access to small businesses and their employers seeking to utilize” SIMPLE plans. According to a press release, the SIMPLE Plan Modernization Act would:

  • Raise the contribution limit for SIMPLE plans from $13,000 to $16,000 for the smallest of businesses (1 to 25 employees) and increase the catch-up limit from $3,000 to $4,500.
  • Give businesses with 26 to 100 employees the option for higher contribution limits and increase their required employer contributions requirement by 1 percent to encourage a transition to 401(k) plans.
  • Provides a reasonable transition period for growing employers.
  • Prevents employers that have had a defined contribution plan in the previous three years from the limit increased to encourage existing plan retention.
  • Modernizes SIMPLE plan filing requirements and modifies rules to facilitate and encourage transitions to traditional plans.
  • Directs the Department of the Treasury to study SIMPLE plans and report to Congress on their use and potential policies for improvements.

IRI will monitor Congress for any action on this legislation.

Any questions should be referred to John Jennings.



IRI Signs on to Joint Trades Letter to IRS Seeking to Make E-Notarization Relief Permanent

In response to a request for comments included in IRS Notice 2021-03, last week IRI signed on to a joint trades letter with several other financial services organizations to reiterate a request for the Internal Revenue Service (“IRS”) to make permanent its temporary relief from the physical presence requirement for spousal consents, as originally announced in IRS Notice 2020-42 and then extended for 6 months by IRS Notice 2021-03.

Last fall, through a prior joint trades letter dated October 1, 2020, IRI along with other trades urged the IRS to make permanent its temporary remote witnessing rules for spousal consents or, at a minimum, extend that relief through the end of the pandemic. 

The joint trades letter noted the IRS’ temporary relief is set to expire on June 30, 2021, notwithstanding the fact that this relief “has made the spousal consent process more secure and more convenient for interested stakeholders”.  The joint trades letter highlighted these demonstrated benefits, the letter set forth that the IRS should “make its remote witnessing rules permanent and, without delay, announce a permanent extension of the relief described in Notice 2020-42 and Notice 2021-03”. 

If the IRS moves forward with the joint trades’ recommendation, as part of a regulatory amendment, the letter recognized that additional requirements may be appropriate for remote witnessing. The letter concluded that any such related additional conditions should go through the notice and comment process of rulemaking, and that the IRS should not permit its current relief to expire.

IRI and our fellow trades will continue to monitor any developments on these matters as issued by the IRS.

Any questions should be referred to Emily Micale.

IRI Signs on to Joint Trades Letter to Treasury on 2022 Draft IRS Forms W-4P and W-4R

Today, IRI and other financial services trade associations submitted a joint letter to the Deputy Assistant Secretary of the Treasury regarding two draft IRS forms that affect retirement plans and annuities. More specifically, these IRS draft forms are to be used by individuals in connection with income tax withholding from periodic payments and nonperiodic distributions from their retirement plans, IRAs, and commercial annuities.

Specifically, the letter addresses two draft IRS Forms, W-4P and W-4R, for the 2022 tax year. These drafts appear to complicate and obscure the process for individuals to elect federal income tax withholding from “periodic payments” they receive from their retirement plans or annuity contracts.

The joint trades letter focuses primarily how retirement plans and annuity contracts are affected by the new draft forms. The letter asks the IRS and Treasury to:

(1) simplify the Form W-4P for individuals,

(2) eliminate the significant new burdens that the Form W-4P would place on entities that make periodic payments,

(3) restore a checkbox on each form to allow individuals to exercise their statutory right to elect out of withholding,

(4) provide more flexibility for electronic substitute forms, and

(5) delay the effective date and provide penalty relief.

IRI and our fellow trades will continue to monitor any developments on these matters as issued by the Treasury and/or the IRS.

Any questions should be referred to Emily Micale.