Roe Bill Promotes Tennessee Retirement Plan Choice

Statement

Today, Rep. Phil Roe, M.D. (R-Tenn.) released the following statement after introducing H.R. 3213, a bill to fix the Internal Revenue Service's pick-up rule to allow Tennessee's state employees to take advantage of new retirement options being offered in the state:

"Local and state governments need flexibility in order to offer sustainable retirement plans to their employees, and Tennessee is leading the way in offering innovative retirement options. In an effort to ensure all employees can take advantage of these options, I introduced legislation to fix the IRS pick-up rule. Currently, government employers may "pick up' or pay employee contributions to certain plans, thus providing a pre-tax contribution benefit to employees. However, IRS regulations currently prohibit the use of the pick-up rule if the employee is given an option to choose between two plans with different contribution rates. This means that if employees are given a choice between plans, they risk losing their pre-tax contribution. I hope that with this legislation, Tennesseans and other retirees across the country will be able to exercise more choice when saving for retirement in the near future.
"The Tennessee Consolidated Retirement System (TCRS) has two retirement plans: a defined benefit Legacy Plan and a new Hybrid Plan for state employees hired since July 1, 2014, which includes defined benefit and defined contribution components. The IRS pick-up rule effectively prohibits TCRS from giving employees the option to switch from the Legacy Plan to the Hybrid Plan. Under H.R. 3213, employees covered by the Legacy Plan will have the freedom to choose between plans without losing their pre-tax contribution benefit."

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