Retirement reform bill: Key provisions that will affect you

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By Brittany De Lea

Lawmakers are working on passing comprehensive retirement reform for the first time in more than a decade, with the aim of helping Americans save enough to live comfortably throughout their older years.

“Obviously it was quite a comprehensive bill,” Chad Parks, founder and CEO of Ubiquity Retirement + Savings, told FOX Business. “I think that the best way to characterize this is, it’s kind of cleaning house … [lawmakers] knew they had all these little things that are not quite right.”

Parks said one of the key parts of the legislation is that it aims to increase access to retirement plans – one of the biggest savings barriers right now.

Lawmakers hope to expand access by increasing the amount of tax credits the government will give to small businesses for having plans up to a maximum of $5,000 per year, from $500 per year. For businesses that automatically enroll employees, the maximum is $5,500.

“The government is paying you to put a retirement plan in place,” Parks said.

The tax credit expires after three years.

The bill would also make it easier for companies to band together to offer multi-employer plans, while requiring businesses to allow some part-time workers to participate.

Multi-employer plans are currently available, but the legislation would change one significant rule that might encourage more businesses to participate. The so-called “bad apple” rule refers to the fact that if 10 employers go into a plan together, and one person doesn’t follow the rules, the whole group will suffer. Now, Parks said, businesses would be allowed to outsource two fiduciary rules to address that dilemma.