By Kenneth Corbin, Barron’s featuring Nick Strain, CFP®, CPWA®, AIF®, Senior Wealth Advisor

Legislation that would encourage saving for retirement and increase the age for taking required minimum distributions is nearing passage on Capitol Hill as part of an omnibus spending bill lawmakers are racing to finalize by the end of the week.

The so-called Secure 2.0 Act has been watched closely by financial advisors, who have largely cheered its provisions aiming to expand access to retirement plans and incentivize saving.

“I believe it’s a done deal assuming the omnibus is adopted, as seems likely,” says Neil Simon, vice president of government relations at the Investment Adviser Association, who has been lobbying for the bill.

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On Tuesday, Senate Majority Leader Chuck Schumer (D.

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, N.Y.) announced a bipartisan agreement on the scope of the spending bill, and he is planning to begin floor proceedings on the measure this afternoon. Lawmakers are working under a Friday deadline to pass the bill, but Schumer is hoping to move even faster in anticipation of a major winter storm later in the week.

“The clock is now ticking until government funding runs out this Friday,” says Schumer.

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  “Between now and the end of the week, the watchwords for the Senate will be ‘speed’ and ‘cooperation.’”

Supporters of Secure 2.0 view the omnibus spending bill as one of the most likely avenues for the measure to advance.

The legislation is seen as a successor to the 2019 Secure Act, which raised the required minimum distribution, or RMD, age to 72, opened access to 401(k) plans for tenured part-time workers, and made it easier for small employers to join together to offer pooled retirement plans, among other provisions.

Secure 2.0 picks up in that vein. The version of the bill lawmakers appear to have settled on in the omnibus legislation would raise the RMD age to 73 next year, and raise it again to 75 in 2033.

The bill offers tax credits for small businesses to help defray the cost of offering a retirement plan, and further expands access to multiple-employer plans.

“Small employers in the nonprofit sector like schools and other charitable organizations can also band together to obtain potentially more favorable retirement plan investment returns and expenses by joining a multiple-employer plan,” says Allison Brecher, general counsel and chief compliance officer at Vestwell, a 401(k) provider catering to small businesses.

It also requires employers to automatically enroll workers in 401(k) and 403(b) plans once they become eligible, and then allow them to opt out. The bill stipulates that employers set an initial contribution rate of at least 3% but not more than 10%.

“Currently, it is a best practice for 401(k) plans to include auto enrollment features, so I think to cement the practice for all retirement plans to have [an] auto-enrollment feature is a good step,” says Nick Strain, an advisor with Halbert Hargrove.

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