This issue’s cover story looks at how this year’s ASPPA Annual Conference is designed to fire up members and help get them ready for the challenges that lie ahead. For the retirement industry, those challenges constitute a perfect storm made up of presidential politics, a struggling economy, a gargantuan deficit, and the desire for tax reform, all concentrated into a very narrow time window.
The bad news is, it’s a challenge the retirement industry hasn’t seen since the last tax reform in 1986. The good news is—ASPPA is not only up to it, it’s already engaged in getting the message across to Congress and policymakers: Don’t fix the economy at the expense of millions of Americans who are trying to save for their retirement.
It’s a case laid out by Judy Miller, ASPPA’s director of retirement policy, in testimony before the U.S. House Ways and Means Committee regarding tax reform and tax-favored retirement accounts.
“Recent tax reform proposals include dramatic cuts in the maximum contributions limits,” says Miller, “limits on the value of the current year’s exclusion for households making over a certain dollar amount, or conversion of the current year’s income exclusion to a credit. All of these proposals would reduce the incentive for small-business owners to sponsor a workplace retirement plan, and would be a big step in the wrong direction.”
ASPPA Executive Director and CEO Brian Graff characterizes the challenge as essentially a math problem.
“Tax reform has to be either revenue neutral or raise more money on an aggregate basis while lowering marginal rates,” he says. “What does that mean? It means the money’s got to come from someplace else. And the biggest pot of money when it comes to addressing revenue issues is a list of so-called tax expenditures, which we’re on. Even though we shouldn’t be. That’s the math problem we have.”
And the case is echoed in the voices of association leaders and members who are gearing up for the coming fight.
“Tax reform lies ahead,” says ASPPA President-elect Barry Max Levy. “Our country’s going to address certain issues, the discussion will be on qualified plans and tax incentives and we have to be prepared to make sure we have the incentives for American workers and employers to contribute for a dignified retirement. The system works, we have to make sure it continues to work.”
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