Coalition of business groups campaign to preserve retirement tax incentives

The Coalition to Protect Retirement, a group of employer and business groups, has launched a national education and advocacy campaign to preserve the current tax incentives for retirement savings. The Coalition is composed of the following associations: American Benefits Council, American Council of Life Insurers, American Society of Pension Professionals & Actuaries, The ERISA Industry Committee (ERIC), ESOP Association, Insured Retirement Institute, Investment Company Institute, Plan Sponsor Council of America, Securities Industry and Financial Markets Association, and the Society for Human Resource Management.

The campaign seeks to help raise awareness about how current tax deferral rules are helping millions of Americans prepare for their own retirement, and will urge workers and their employers to tell Congress not to change or limit these incentives to save.

“We feel very strongly that Congress should not be considering changes that undermine or limit retirement savings tax incentives as part of any tax reform or deficit reduction effort. If anything, Congress should be looking to enhance retirement tax incentives to continue helping Americans save for their retirements,” said Kathryn Ricard, ERIC’s Vice President for Retirement Policy.

Survey shows opposition to changing retirement tax rules

The launch coincides with the release of a survey conducted in mid-October that shows that Americans overwhelmingly oppose changing tax rules for retirement savings accounts. According to the survey, 87% of all Americans and 95% of those who have a tax-deferred 401(k)-like retirement plan accounts believe retirement savings should be “off limits” to Congress and not a source of new revenue for the government.

In a November 7, 2013 news release, the Coalition noted that individuals at all income levels have benefitted from these incentives, particularly middle-income earners. More than 70% of American workers who earn between $30,000 and $50,000 a year contribute to a retirement savings plan when one is offered at work.

“Given the vast numbers of baby boomers who reach retirement age every day, retirement savings incentives are needed more than ever,” said Kenneth E. Bentsen, Jr., President of the Securities Industry and Financial Markets Association (SIFMA). “They are doing what they were intended to do – helping people who need them most to take responsibility for their own retirement security.”

The Coalition also emphasized the important role employers play in helping workers prepare for retirement. Between 2000 and 2009, employers contributed almost $3.5 trillion to public and private retirement plans. Changes to current incentives could adversely affect employer-sponsored plans, contributions, and the retirement security of millions of Americans.

“Raising new revenue should not come at the expense of Americans’ retirement savings, not now or in the future,” said Brian Graff, CEO and Executive Director of the American Society of Pension Professionals & Actuaries (ASPPA). “If Congress reduces the benefits of offering and contributing to retirement savings, fewer people will save. The result: more of tomorrow’s retirees will need to turn to the government for help, and that will mean more federal spending.”

Source: Coalition to Protect Retirement news release, November 7, 2013. ERIC news release, November 7, 2013.

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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