When a bill to improve Americans' retirement security sailed through the House last month, it looked like the country was on the brink of the first major retirement reform since 2006. Then the bill went to the Senate. Weeks later, it still has not come up for a vote. Known as the Secure Act, the proposal is aimed at enhancing retirement by making it easier for more individuals to save.

Janhvi Bhojwani | CNBC

Key changes include allowing small employers to band together to offer 401(k) plans, giving part-time workers access to retirement plans, repealing the 70½ age limit for individual retirement account contributions, boosting the age for required minimum distributions to 72 from 70½ and expanding access to annuities in 401(k) plans. The Secure Act was approved by the House on May 23 by 417-3. Proponents were said to be hoping to push it through the Senate using a process called unanimous consent. That means that the Senate would vote on the House version without making changes. That hasn't happened partly due to opposition from Senator Ted Cruz, R-Texas. Proposals he supports to expand the use of 529s to pay for home schooling and therapy for disabilities, among other expenses, were dropped from the House legislation. Other expansions of the 529 college savings program, including the ability to pay for student loans and apprenticeships, remained. "The retirement bill that unanimously passed in the House Ways and Means Committee included the expanded 529 savings plan package," a spokesman for Cruz said. "Unfortunately, at the behest of special interest groups, Speaker Pelosi removed the 529 expansion from the bill before sending it to the Senate." "Senator Cruz believes we should add it back in and pass a retirement bill that includes both the Gold Star tax fix and the 529 expansion," the spokesman said. The Gold Star fix would prevent children and spouses of fallen service members from getting hit with unexpectedly high tax bills following recent tax reform changes.

The Secure Act's delay this week prompted a group of retirement industry advocacy groups to send a letter addressed to all senators, urging them to vote on the current version. "We're talking to all senators about trying to advance the legislation," said Paul Richman, chief government and political affairs officer at the Insured Retirement Institute, a financial services trade association focused on the retirement income industry and one of the organizations that signed the letter.

Changes to 529 plans

For policy watchers, the 529 changes are a surprising sticking point for what's considered some of the biggest changes to retirement legislation since the Pension Protection Act in 2006. "This is the most active front for 529 legislation at the moment," said Jake Spiegel, senior research analyst on the policy research team at Morningstar. "It does seem kind of odd that it is attached to a piece of legislation that is designed to make retirement saving easier." Current estimates peg the number of home-schooled students in the U.S at more than 2.3 million, according to the National Home Education Research Institute.

But 529 savings plans are underutilized even under current rules, Spiegel said. In fact, 67% of Americans do not know what a 529 plan is, according to a recent survey from financial services firm Edward Jones. What's more, using that savings plan for short-term needs such as home schooling does not necessarily make sense, Spiegel said. "The big benefit of 529s is that the capital gains and earnings are tax-free," Spiegel said. "It's really beneficial if you open up a 529 for your beneficiary when they're first born and then you have 18 years for that money to grow."

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