ASPPA News from the Field

LAS VEGAS (May 4, 2012) – The National Tax Sheltered Accounts Association (NTSAA) Compliance Conference in Las Vegas was by all accounts a real success. Practitioners from all segments of the tax-exempt and governmental plans community gathered to discuss issues ranging from the highly technical to the contextual as the industry clearly continues to deal with the aftermath of the significant regulatory reform of 2007.

And it’s not surprising that significant issues remain unresolved. By the Internal Revenue Services’ (IRS) own account, the 403(b) regulatory reform of 2007 represented the first major update to these provisions of the Code in 43 years. With large segments of the 403(b) governmental market exempt from ERISA, and all of the gradual operational impacts since, these changes are continuing to have day-to-day impact in plan operations.

And it is readily apparent that the pace of changing regulations does not appear to be slowing down. Having swallowed the most dramatic impact of plan document requirements and multi-vendor compliance coordination, new fee disclosure requirements and major initiatives still pending from the IRS—from the prototype plan document program, yet to be announced, to an much anticipated update to the Employer Plans Compliance Resolution System (EPCRS), a system designed before the 403(b) plan document requirement even existed—keep practitioners of all stripes at alert.

The conference featured technical and legal experts, focusing on topics ranging from plan design advantages that can be achieved by combining multiple plans—457, 403(b), 401(a), 414(m)—and ways to maximize employer contributions in designing attractive benefit programs to support public sector recruitment and retention efforts. Key break-out sessions on the nuances of steeple-church and church related organizations were led by renowned specialists and experts in the field.

Perhaps the most significant shoe yet to drop for the non-ERISA segment of the market is the ERISA-effect—the best practices framework that ERISA-exempt markets will ultimately adopt as a result of regulatory momentum in the ERISA world. In the public sector, the impact of a more hands-on approach to managing benefits programs comes with a tangible price tag as well in allocating already scarce resources and staffing demands. It will be important that product and investment providers, third party administrators and financial advisors be prepared to help those sponsoring non-ERISA plans establish and manage the “best of the best” practices that help them and their employees maintain a high comfort level with the 403(b) sponsored plan – and NTSAA ASPPA is dedicated to helping with the educational process that will be needed by all parties.

As an organization, NTSAA isn’t sitting on the sidelines. With the backing of ASPPA resources, NTSAA has collaborated to develop a voluntary fee disclosure program designed to capture the spirit of the rules driving 408(b)(2) and 404(a)(5) required disclosures for ERISA counterpart plans. As with any significant undertaking, it will take time to develop traction and wide-spread acceptance. But the process is underway and gaining momentum.

And last, but not least, the public-sector governmental 403(b) plan sponsors have yet another force to reckon with—the impact of public policy and state legislation. In an era where state defined benefit plans struggle with (in)adequate funding, the result has been a trend towards semi-privatization through defined contribution plan alternatives.

Understandably, state legislative initiatives that impact this market are at an all-time high. This backdrop of centralized, legislative decision-making imposed on a public market segment that has been accustomed to minimal regulation, is having a profound impact. With participant success at the forefront, the lively debate on the best ways to improve participant outcomes and to create more secure retirement futures will no doubt continue.

Meanwhile, practitioners continue to work through plan termination rules, grandfathered versus orphaned accounts, changes to Form 5500 reporting requirements, evolving IRS audit guidelines, fee disclosure, plan document compliance, transitional relief and field assistance bulletins. Product providers, third party administrators, lawyers, consultants, financial advisors and service providers of all stripes continue to find value—and create value—in a forum like this that encourages dialogue and seeks resolution to the obstacles that would otherwise inhibit adoption of best practices in all respects. Any independent practitioner in this market segment looking to build a resource library of materials and network with experts in the field would find this event invaluable.

Amy Simonson
Vice President
Verity Asset Management
NTSAA member since 2000

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Advance Look––Super Models

If you read nothing else in the spring issue of 403(b) Advisor, I urge you to take a look at Neil Wernick’s “Philadelphia Story” on page 24. It serves as a model for how NTSAA and ASPPA operate in protecting the legitimate interests of advisors in the 403(b) marketplace.

By now you should know the story: Consultants in the employ of some major players in the industry have told state legislators and school districts that teachers are paying too much for their 403(b) accounts. Their advice is to eliminate what they have now and replace it with low-cost, no-frills, do-it-yourself providers.

But school districts need to know—and NTSAA is working with them to make sure they understand—that teachers want and need choices. Teachers are professionals, but they’re not professional investors. They need help and they shouldn’t be afraid to admit it. Advisors can provide that help, and they shouldn’t be ashamed to expect reasonable compensation for it.

So now, in Philadelphia at least, more than 1,200 teachers are still able to maintain their long-standing relationships with trusted advisors, and those advisors are able to continue making a living. But one has to ask: how long before another state-run 403(b) plan or another school district decides to reduce the number of investment providers in their plan? Will they know about the research sponsored by the ASPPA Pension Education and Research Foundation that found significant reductions in participation in 403(b) plans when the number of investment providers was decreased? How many states and school districts will NTSAA be able to educate without more advisors’ support? Without advisors’ investment in NTSAA, resources won’t last forever.

OK, so maybe the value NTSAA and ASPPA provide isn’t as obvious to everybody. Skeptics need to know what they’re getting for their money, and the consultants who disparage the value of 403(b) advisors are certainly skeptical. Some skeptics claim that advisors won’t tell you about the fees and commissions they make on the products they sell because they don’t want you to know.

Really? OK, so let’s tell them. Let’s develop a simple, accessible system that lets every teacher with a 403(b) account see exactly what services he or she is paying for and exactly how much they cost. Let’s do it in a way that enables them to compare apples to apples and decide for themselves whether they think the fees and commissions are justified, or they want to go the no-frills route.

Who came up with that idea? The consultants? Nope. That was NTSAA again. It took them about eight months and a lot of time and effort (much of it pro bono from volunteers from NTSAA and the National Education Association) to come up with the 403(b) Model Disclosure Form. Now it’s out there and available so school districts can level their 403(b) playing field without eliminating all the players.

So now that NTSAA has successfully changed the conversation from costs and fees to transparency, let’s change it back again.

Do those aforementioned consultants work for free? Probably not. And if their clients are paying for their expertise, it would be nice if they actually had some.

Steve Sullivan is editor of 403(b) Advisor magazine. He lives in Baltimore, Md.

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LAS VEGAS (May 3, 2012) The 2012 NTSAA Compliance Conference kicked off this morning with a presentation by Chris DeGrassi, Executive Director of NTSAA, on the state of the 403(b) market. In reviewing some of the events of the past year, DeGrassi made it clear that our business is under attack. Under the guise of Consolidate, Reform, and Monopolize, some 403(b) companies have a stated goal: no independent K-12 403(b) professionals in five years.

The reasons are not hard to discern. K-12 403(b) plans represent approximately $100B in assets and there is a well-funded campaign to promote mandatory, single provider, state-sponsored 403(b) programs. The good news is that NTSAA/ASPPA is not taking the attack lying down. Over the past several months NTSAA has helped assemble a coalition of stakeholders to protect educators’ right to choose their provider. One key in defeating single provider models, is to promote fee transparency.  Additionally, as states consider possibly moving from a defined benefit to a defined contribution plan, the plan of choice should be a 403(b). Other key advocacy points include the importance of local school districts maintaining investment choice, having 403(b) programs be administered by product neutral third party administrators (TPA), and to have all product providers comply with uniform fee disclosure standards.

For a more detailed description of state legislative activity, and for NTSAA tools promoting these positions, DeGrassi encouraged everyone to check the www.savemy403b.org site frequently. He also stressed the importance of growing NTSAA membership so we can be more effective in having state legislators listen to our point of view.

David Blask
CPC, TGPC
NTSAA Member since 1980
Senior Pension Consultant
Lincoln Investment Planning, Inc.

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ARLINGTON, VA, (May 3, 2012) – The National Association of Plan Advisors (NAPA)—an individual membership organization created by and for retirement plan advisors—today announced it has exceeded its first-year membership goal just six months after its launch.

“A fact worth noting is that the vast majority of NAPA’s 3,000 members are frontline advisors,” said Marcy L. Supovitz, NAPA president and principal of Boulay Donnelly & Supovitz Consulting Group, Inc. “Until NAPA came along, there was no professional association that was purely dedicated to the retirement plan advisor community.”

NAPA is a sister organization of the American Society of Pension Professionals & Actuaries (ASPPA), and is supported by more than 65 Founding Partners that include financial institutions, broker dealers and RIA firms. Advisors affiliated with NAPA Founding Partners have their annual dues waived in 2012.

“NAPA’s value proposition is two-fold,” said Supovitz. “It gives plan advisors access to critical business intelligence and opportunities to network; but more important, NAPA provides advisors with a greatly needed voice in Washington, DC.”

“Policymakers have little understanding of what 401(k) plan advisors do,” said Brian Graff, ASPPA executive director and CEO. “The recent debates over a fiduciary standard and the definition of investment advice under ERISA proved that. Given the economy’s continued uncertainty and the threats to retirement plans posed by tax reform, there’s no question that advisors need to have their views represented at upcoming debates and policy discussions. NAPA has the right leaders for what lies ahead.”

NAPA is governed by a Leadership Council that consists of nine advisors with voting privileges, plus five non-voting ex-officio members. The Council includes advisors Marcy Supovitz, Sam Brandwein, Steff Chalk, Mark Davis, Joe DeNoyior, Steve Dimitriou, Tony Franchimone, Joe Gordon, and Bruce Gsell; plus industry council members Bill Chetney, Bill Elmslie, and Gary Kleinschmidt. The NAPA Leadership Council is charged with setting the strategic direction and making policy decisions on all matters related to NAPA’s mission.

This fall, the organization will launch a web portal that its creators say will be unlike anything in the industry. “The portal will provide a home base where advisors can connect and have access to directories and curated content on a daily basis,” offered Fred Barstein, the portal’s chief architect. “This will be a big deal for NAPA and should help attract even more attention to all we’re doing to benefit retirement plan advisors.”

For more information on NAPA membership or the NAPA Founding Partners program visit
www.napa-advisors.org

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The National Association of Plan Advisors (NAPA) is an affiliate organization of the American Society of Pension Professionals & Actuaries (ASPPA). NAPA was created by and for retirement plan advisors with a specific purpose—to provide plan advisors with greatly needed advocacy, business intelligence and superior networking opportunities. Membership is open to all retirement plan advisors and support personnel. NAPA’s mission is to be a leader in the evolution of the national retirement system to improve transparency, effectiveness, and governance in an effort to improve the retirement outcome and security for participants. For more information, visit www.napa-advisors.org

The American Society of Pension Professionals & Actuaries (ASPPA) is a national organization of more than 8,500 retirement plan and benefits professionals that serves as the educator, voice, and advocate for the employer-based retirement system. ASPPA members are administrators, actuaries, advisors, attorneys, accountants, and other financial services professionals who provide consulting and administrative services for qualified retirement plans. ASPPA is based in Arlington, Virginia, and has 21 regional ASPPA benefits councils (ABCs) providing local retirement plan employee benefit professionals with opportunities to participate in ASPPA activities in their local communities. For more information, visit www.asppa.org

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Event: The Mid-Atlantic Benefits Conference, co-sponsored by ASPPA and the Internal Revenue Service (IRS), is a forum covering various topics in retirement planning. The program includes an update on current legislative and regulatory initiatives, as well as guidance on issues in plan administration, compliance, and new practice trends. The conference will also feature a special session covering recent developments in fee disclosure and the state of tax reform.

Attendees consist of a diverse group of retirement plan professionals including accountants, actuaries, attorneys, plan administrators and Third Party Administrators (TPAs).

Journalists who cover personal finance, pensions or retirement will hear from industry experts and officials from the Internal Revenue Service (IRS) and Department of Labor (DOL). For more information, view the brochure.

Dates: May 21 – 22, 2012 (Monday – Tuesday)
Time: 8 am – 6 pm

Agenda Highlights:

• Washington/IRS Update – Issues and Trends in Retirement Planning (Monday, May 21)
  Debra A. Davis, ASPPA, Arlington, VA
  Andrew E. Zuckerman, Internal Revenue Service, Washington, D.C.
  Monika Templeman, Internal Revenue Service, Baltimore, MD
• Keynote: Thoughts on Washington (Monday, May 21)
  Brian H. Graff, ASPPA, Arlington, VA
• Defined Benefit/Contribution Combinations & Cash Balance Plans (Monday, May 21)
  Thomas J. Finnegan, The Savitz Organization, Inc., Philadelphia, PA
• Fiduciary Issues & Department of Labor Update (Tuesday, May 22)
  Lisa Scimeca, Department of Labor/EBSA, Philadelphia, PA
• Plan Termination Problems (Tuesday, May 22)
  Ilene H. Ferenczy, Ferenczy & Paul, LLP, Atlanta, GA
• Administration & Special Rules in Multiple Employer Plans (Tuesday, May 22)
  Robert J. Toth, Jr., Law Office of Robert J. Toth, Jr., Fort Wayne, IN

Location:
Radisson Plaza-Warwick Hotel
220 S 17th St. | Philadelphia, PA
Tel: 800.395.7046

RSVP: Media interested in attending the Mid-Atlantic Benefits Conference should contact Melinda Semadeni, Director of Media Relations, at msemadeni@asppa.org or (703) 516-9300 or register online here. For more information, view the brochure or website.

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ARLINGTON, VA, (April 30, 2012) – The following is a statement from Craig P. Hoffman, General Counsel and Director of Regulatory Affairs of The American Society of Pension Professionals & Actuaries (ASPPA), the Council of Independent Recordkeepers (CIkR), and The National Association of Plan Advisers (NAPA) from a comment letter filed with the U.S. Department of Labor’s (DOL) Employee Benefits Security Agency’s (EBSA) regarding issues with the Department’s recently released 408(b)(2) regulation.

“ASPPA and its affiliate organizations, CIkR, and NAPA, continue their support of the DOL’s efforts to improve fee transparency. Full disclosure by service providers of what they charge and how they are paid is critical information plan fiduciaries need in order to fulfill their responsibilities under ERISA. Greater fee transparency allows plan sponsors to make better, more informed decisions, which ultimately is to the benefit of plan participants. There is a need, however, for clarification from the Department on the proper treatment of asset allocation strategies under the new rules and for a transitional period of relief as practitioners and plan sponsors move forward with the implementation process.

Many participants will need help in understanding how to benefit from the information they will be given about each of a plan’s Designated Investment Alternatives (DIAs). The Department has encouraged plan sponsors to offer investment education to their employees. This education is usually provided under the guidelines the Department issued in Interpretative Bulletin 96-1. It often includes examples of asset allocation strategies and investment models that may be appropriate based on an individual’s age, investment time horizon and risk tolerance. These services are critically important in assisting participants in achieving a diversified and well reasoned investment portfolio from among the plan’s DIAs. Concerns have been raised that these services might themselves be considered to be a DIA which if true, would make these services far more difficult to offer. This is because of the extra regulatory disclosures that would be required in addition to the disclosures on the underlying funds. For this reason, we strongly recommend that the DOL issue guidance that clarifies that services such as asset allocation strategies and model portfolios offered in conjunction with investment education as contemplated by Interpretative Bulletin 96-1 are not themselves DIAs and would not engender any disclosure obligation beyond that required for the underlying funds that are the true DIAs.
The effective date of the final 408(b)(2) regulations is only weeks away, but there remain a number of issues that could benefit from clarifying guidance. Unfortunately, our members have had to move forward with their systems work in order to meet the regulatory deadline. In doing so, they have had to make decisions without the benefit of clarifying guidance. Many have already begun the task of furnishing the required disclosures. It would be very disruptive if clarifying guidance is now released that requires immediate changes to work that has already been done.

For this reason, we request that the Department provide for a good faith transition period for compliance in recognition of the uncertainties that remain in regard to the regulations’ application. In past correspondence, ASPPA has emphasized the need for an orderly transition period. Most providers began the necessary work to implement these regulatory initiatives some time ago. In doing so, many have made good faith determinations as to what the regulations require. If clarifying guidance is issued, it should recognize the need for a transition period during which good faith efforts to comply will be acceptable.

We have provided extensive comments to the DOL at every step of the fee disclosure process. As we near the ‘finish line,’ it is crucial that DOL provide clarification on these issues and give providers enough time to make the required system changes to implement the final rules.”

For more detail on ASPPA’s recommendations to the DOL read our comment letter.

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About ASPPA: The American Society of Pension Professionals & Actuaries (ASPPA) is a national organization of more than 8,500 retirement plan and benefits professionals that serves as the educator, voice, and advocate for the employer-based retirement system. ASPPA members are administrators, actuaries, advisors, attorneys, accountants, and other financial services professionals who provide consulting and administrative services for qualified retirement plans.

About CIkR: The Council of Independent 401(k) Recordkeepers (CIkR) is a national organization of 401(k) plan service providers. CIkR members are unique in that they are primarily in the business of providing retirement plan services as compared to financial services companies who primarily are in the business of selling investments. Collectively the members of CIkR provide services for over 68,000 retirement plans covering 2.8 million participants and holding in excess of $120 billion in assets.

About NAPA: The National Association of Plan Advisors (NAPA) is an affiliate organization of the American Society of Pension Professionals & Actuaries (ASPPA). NAPA was created by and for retirement plan advisors with a specific purpose—to provide plan advisors with greatly needed advocacy, business intelligence and superior networking opportunities. Membership is open to all retirement plan advisors and support personnel. NAPA’s mission is to be a leader in the evolution of the national retirement system to improve transparency, effectiveness, and governance in an effort to improve the retirement outcome and security for participants.

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Event: The Benefits Conference of the South, co-sponsored by ASPPA and the Internal Revenue Service (IRS), is a forum for in-depth discussion on the state of pensions, employee benefits, and retirement planning. A diverse group of retirement plan professionals—including accountants, actuaries, attorneys, plan administrators and Third Party Administrators (TPAs)—join industry experts and regulatory officials to discuss the latest legislative and regulatory activity, as well as industry and practice trends. The conference will also feature a special session covering the impact and significance of the new fee disclosure regulations.

Journalists who cover personal finance, pensions or retirement will hear from top practitioners and officials from the Internal Revenue Service (IRS).

For more information, view the brochure.

Dates: May 17-18, 2012 (Thursday – Friday)
Time: 8 am – 6pm

Agenda Highlights:

• Washington Update – Impact of New Disclosure Rules (Thursday, May 17)
  Debra A. Davis, Assistant General Counsel & Director of Government Affairs, ASPPA, Arlington, VA
  Andrew E. Zuckerman, Internal Revenue Service, Washington, D.C.
• Key Takeaways from IRS 401(k) Questionnaire (Thursday, May 17)
  Monika A. Templeman, Internal Revenue Service, Baltimore, MD
• Prohibited Transactions – Procedures for Plan Administrators (Thursday, May 17)
  Ilene H. Ferenczy, Ferenczy & Paul, LLP, Atlanta, GA
• Service Provider and Participant Fee Disclosure Regulations (Friday, May 18)
  Stephen W. Forbes, SunGard, Littleton, CO
• Multiple Employer Plans – The Final Debate (Friday, May 18)
  Ilene H. Ferenczy, Ferenczy & Paul, LLP, Atlanta, GA
  Robert J. Toth, Jr., Law Office of Robert J. Toth, Jr., Fort Wayne, IN
• Participant Loans, Errors & Corrections (Friday, May 18)
  Stephen W. Forbes, SunGard, Littleton, CO
  Thomas Petit, Internal Revenue Service, Austin, TX

Location:
Atlanta Airport Marriott
4711 Best Road | Atlanta, GA 30337
Tel: 404.766.7900

RSVP: Media interested in attending the Benefits Conference of the South should contact Melinda Semadeni, Director of Media Relations, at msemadeni@asppa.org or (703) 516-9300 or register online here. For more information, view the brochure or website.

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Event: The NTSAA Compliance Conference is a national forum for professionals in the 403(b) and 457(b) marketplace. A variety of professionals—including plan sponsors, providers, agents, broker/dealers, and sales/marketing managers—join industry experts and regulators to discuss compliance solutions and best practices.

The meeting will also feature an in-depth discussion of the new fee disclosure form and implementation of the fee transparency initiative for non-ERISA 403(b) Plans developed by NTSAA’s Fee Transparency Taskforce Journalists who cover industry trends and the regulatory environment for the 403(b) and 457(b) marketplace will hear from top practitioners and officials from the Department of Labor (DOL) and Internal Revenue Service (IRS).  For more information, view the brochure.

Dates: May 3-4, 2012 (Thursday – Friday)

Time: 8 am – 6pm

Agenda Highlights:

• State of the Market: Getting Up to Date with the Latest Legislative & Regulatory Initiatives (Th. May 3)
      Chris M. DeGrassi, Executive Director, NTSAA, Arlington, VA
      Craig P. Hoffman, General Counsel & Director of Regulatory Affairs, ASPPA, Arlington, VA
• Open Forum with the Department of Labor & Internal Revenue Service (Thursday, May 3)
       Jason Levine, Internal Revenue Service, Washington, D.C.
       Susan Rees, Department of Labor, Washington, D.C.
• Expert Panel and Q&A with Internal Revenue Service and Department of Labor (Friday, May 4)
      Sue D. Diehl, PenServ Plan Services, Inc., Horsham, PA
      Jason Levine, Internal Revenue Service, Washington, D.C.
      Susan Rees, Department of Labor, Washington, D.C.
      Richard Turner, VALIC, Houston, TX
• In-depth: Fee Disclosures for Both ERISA & Non-ERISA Plans (Friday, May 4)
      Mark Heisler, ADMIN Partners, LLC, Cherry Hill, NJ
      Robert J. Toth, Jr., Law Office of Robert J. Toth, Jr., Fort Wayne, IN
      Richard Turner, VALIC, Houston, TX

Location:
Paris Las Vegas
3655 Las Vegas Boulevard South | Las Vegas, NV 89109
Tel: 877.603.4389

RSVP: Media interested in attending the NTSAA Compliance Conference should contact Melinda Semadeni, Director of Media Relations, at msemadeni@asppa.org or (703) 516-9300 or register online . For more information, view the brochure or website.

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“Americans depend on their employee sponsored plans to save for retirement. Two key features distinguish retirement savings tax incentives from other incentives in the U.S. Tax Code–the deferral nature of the incentive, and the non-discrimination rules that make employer-sponsored plans very efficient at delivering benefits across the income spectrum. Simply put, tax incentives for retirement savings play an important role in encouraging employers to sponsor and maintain retirement plans and encouraging participants to contribute to such plans.

Deduction Not Deferral
First, unlike other individual tax incentives, incentives for retirement savings are deferrals, not permanent exclusions. When employer-paid health benefits are excluded from income, or mortgage interest is deducted, those amounts will never be taxed. With a traditional retirement savings account, no income taxes are paid on contributions or investment earnings the year they are credited to that account. However, both contributions and earnings are included in taxable income when the amounts are distributed from the plan at retirement. In other words, every single dollar excluded from income now because its retirement savings, will be included in income in a future year. Since most of those future years are outside the budget window, looking at the so-called “tax expenditure” for defined contribution retirement plans on a cash basis over a budget window greatly overstates the cost of the incentive. The faulty analysis dramatically exaggerates the real cost of the tax incentives for retirement plans. Using present-value analysis accurately reflects the true cost—former Joint Committee on Taxation (JCT) economist Judy Xanthopoulos and tax attorney Mary M. Schmitt calculate that present-value estimates of the five-year cost of retirement savings tax expenditure are 54 percent lower than those of the JCT and the Treasury’s Department’s Office of Tax Analysis (OTA). (“Retirement Savings and Tax Expenditure Estimates” April 2012).

Non-Discrimination Rules Ensures Everyone Saves
The second distinguishing feature is the non-discrimination rules that make sure incentives for employer-sponsored retirement plans don’t discriminate in favor of the highly paid, and limit pay that can be counted toward benefits. As a result, this tax incentive is more progressive than the current progressive tax code. Households making less than $100,000 pay 26% of income taxes, but get over 60% of the benefit of this tax incentive. And this analysis actually understates the benefit for these groups because it ignores the fact that a good part of a small business owner’s “tax savings” for a year is actually transferred to other employees in the form of contributions.

Saving at Work—Works
Data clearly shows that the key to promoting retirement security is workplace savings. Over 70% of workers earning from $30,000-$50,000 will participate in a plan at work, but less than 5% will save through an IRA on their own. Data also shows the current tax incentives have been very successful at encouraging workplace retirement plans. Bureau of Labor Statistics data shows 78 percent of all full time workers have access to a workplace retirement plan, with 84 percent of those workers participating. Almost 80% coverage is a success story. More needs to be done, but the Committee should build on the successes of the system, and be mindful that Americans save for retirement at work. We support the auto-IRA proposal in Mr. Neal’s bill, for example, as a way to expand workplace savings by building on the current system.

Simplification
One of the questions posed for this hearing is whether or not there are too many types of plans. The simple answer is ‘No”. A proposal to combine all defined contribution plans into a single type of plan might look like simplification on paper, but in practice combining 401(k), 403(b) and 457(b)’s into a single type of plan would disrupt savings for employees of state and local governments and other nonprofits. And believe me, when you talk to an employer about setting up a plan, options and flexibility are not the enemy. One size definitely does not fit all. That’s not to say simplification is not needed. For example, we support the Small Business Pension Promotion Act, sponsored by Representatives Gerlach, Kind and others. We would be pleased to work with the Committee on these and other simplifications.

Improve Don’t Dismantle
Recent tax reform proposals include dramatic cuts in the maximum contributions limits, 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.”

More information on ASPPA’s position on Retirement Savings proposals:
• Read ASPPA’s written and oral testimony before House Ways and Means Committee.
• Read our research “Retirement Savings and Tax Expenditure Estimates,” April 2012
• View our infographic “Government’s Bad Math Could Hurt 401(k)s”

A recording of the hearing will be available on the House Ways & Means Committee website here

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About ASPPA: The American Society of Pension Professionals & Actuaries (ASPPA) is a national organization of more than 8,500 retirement plan and benefits professionals that serves as the educator, voice, and advocate for the employer-based retirement system. ASPPA members are administrators, actuaries, advisors, attorneys, accountants, and other financial services professionals who provide consulting and administrative services for qualified retirement plans. www.asppa.org

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