Tax Reform Should Not Harm Main Street’s Retirement Plan

Analysis Shows Retirement Tax Incentives Benefit American Workers

The following is a statement from Brian H. Graff, Executive Director & CEO of the American Society of Pension Professionals & Actuaries (ASPPA) from research released today on “Distributional Analysis and Pension Tax Provisions.”

“How do you measure the effectiveness of incentives to encourage American workers to save for retirement? The fact that these incentives encourage employers to sponsor retirement plans, and that workers are 14 times more likely to save through these workplace plans than to set up an IRA on their own is one clear measure.

The nondiscrimination rules that are unique to employer-sponsored plans assure the benefits of these arrangements are wide-spread, not concentrated on those earning $200,000 or more. ASPPA’s analysis of how the tax incentive for employer-based retirement plans benefits workers of all income levels released today shows that 71% of the benefits from retirement savings tax incentives goes to workers earning less than $150,000.

Just to put this in perspective, only 8% of the tax benefit for the capital gains tax break goes to families making less than $150,000.

The employer-based retirement savings tax incentive is the efficient and effective way to help Main Street save for retirement. Proposals that would discourage employers from continuing to sponsor these plans are misdirected. We urge Congress to be very cautious when considering tinkering with a system that is helping so many American workers save for their financial future.”

Read more of ASPPA’s proposals to enhance private retirement plans included in a submission to the U.S. House Ways and Means Committee’s Pensions and Retirement Tax Reform Working Group here.

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About ASPPA: The American Society of Pension Professionals & Actuaries (ASPPA) is a national organization of more than 11,000 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.

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