Source: United States Senator for New Jersey Bob Menendez
WASHINGTON, D.C. – U.S. Senator Bob Menendez (D-N.J.), a senior member of the Senate Finance Committee, today applauded the advancement of the Disaster Retirement Savings Act, which was included in the bipartisan Enhancing American Retirement Now (EARN) Act passed by the Senate Finance Committee today.
Sens. Menendez and Bill Cassidy, M.D. (R-La.) introduced the Disaster Retirement Savings Act (S.2583) last year to expedite relief for those affected by natural disasters. The legislation allows individuals impacted by natural disasters to access their retirement benefits without being forced to pay any withdrawal fees or penalties in order to cover emergency costs.
“I applaud the Senate Finance Committee’s passage of the EARN Act to improve our nation’s retirement system. I’m proud to have worked with Sen. Cassidy, Chairman Wyden, Sen. Cardin, and my colleagues to include the provisions of my bipartisan Disaster Retirement Savings Act to expedite relief for Americans affected by natural disasters,” said Sen. Menendez. “When this bill is signed into law, individuals affected by disasters will no longer be at the whims of Congress to withdraw, without penalty, from their retirement accounts after a natural disaster—the importance of which New Jersey families know all too well after Superstorm Sandy. This will provide relief for those impacted by Hurricane Ida last year and all those who may be impacted by future disasters.”
The EARN Act will make improvements to the retirement system by expanding retirement for working individuals and retirees. The legislation will:
- Permanently, and without an act of Congress, allow individuals to withdraw up to $22,000 per natural disaster, without penalty from a 401(k) or IRA plan;
- Expand the saver’s credit to allow for matching retirement contributions for low-and moderate-income savers to save for retirement;
- Allow, for the first time, the ability for individuals to take up to $1,000 out of their retirement savings plan for emergency savings, without penalty;
- Remove the 10% early withdrawal penalty on retirement savings for individuals who are domestic abuse victims; and
- Expands workplace retirement savings opportunities for part-time workers by reducing the requirement that a part-time employee work for 500 hours for three years, down to two years. This will significantly improve access to a retirement savings plan for women—especially women of color.
A section-by-section summary of the legislation can be found HERE.
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