ASPPA launches initiative to save 401(k) plans from tax reform

American Society of Pension Professionals and Actuaries (ASPPA) Executive Director and CEO Brian Graff has announced the launch of the “SaveMy401k – Protect My Piggy!” campaign with goal of protecting 401(k) plans from being cut as a result of tax reform efforts expected from Congress in 2013. Graff announced the initiative on October 29, 2012 at the 2012 ASPPA Annual Meeting.

Graff reminded the audience of the impact of tax reform enacted in 1986. “Many of you remember those days; and if you were working in this business back then, you certainly remember those days,” he said. “401k plans got whacked by 70 percent. Businesses terminated plans. ASPPA members lost their jobs and businesses. And unfortunately, our industry — and especially ASPPA — just wasn’t prepared. But it didn’t have to be that way.”

“The strategy is to mobilize ASPPA members now and have everyone ready to reach out to their networks before Congress reconvenes in January,” Graff said. “We want Congress to feel our heat before they get immersed in tax reform. We need to educate them about why they should not mess with the 401k when seeking new sources of revenue.”

Retirement “simplification”

In addition, Judy Miller, ASPPA’s director of retirement policy and executive director of ACOPA, ran down the various federal and state legislative initiatives that are aimed at “simplifying” the retirement system.

“Simplification, such as combining different types of plans into a single design, isn’t always productive,” Miller said. “The theory is that consolidating options simplifies, eliminates confusion, and expands coverage. The reality is that it reduces options and coverage. Flexibility in design helps sell plans, it’s not an enemy of coverage,” Miller added.

Update on DOL guidance

Craig Hoffman, ASPPA’s general counsel and director of regulatory affairs, provided an update on ASPPA’s efforts in working with the IRS and Labor Department to make sure that new regulations are not onerous or counterproductive.

Hoffman said that Field Assistance Bulletin (FAB) 2012-02 included new guidance with regard to plan-provided brokerage windows. FAQ 30 in FAB 2012 implied that fiduciaries may have responsibility for monitoring the investment choices made by participants through a brokerage window. ASPPA met with DOL officials and pointed out that this position was a surprise to the retirement plans community and problematic coming so late in the regulatory process. ASPPA suggested that this issue would be better addressed in more formal rulemaking with public comment and economic analysis. The DOL apparently agreed, Hoffman noted, as FAB 2012-02 was officially revised to remove the issue but with a promise to seek further comment in the future.

Source: ASPPA news release, October 29, 2012.

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For more information on this and related topics, consult the CCH Pension Plan Guide, CCH Employee Benefits Management, and Spencer’s Benefits Reports.

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