Tax reform initiatives put forth by both the Republicans and Democrats fail to protect retirement savings, according to Brian Graff, executive director and CEO of the American Society of Pension Professionals & Actuaries.
Graff said he is most concerned about Rep. Paul Ryan’s interview this past week on Fox News in which he said he would like to eliminate or drastically reduce incentives for 401(k) plans. “This could be a disaster for small business retirement plan coverage,” Graff said.
The EBRI report, written by Jack VanDerhei, looked at Obama’s proposal on federal debt reduction, “The Moment of Truth,” which was issued in December 2010. The document proposed modifying private-sector retirement plans by capping annual “tax-preferred contributions to the lower of $20,000 or 20 percent of income,” sometimes called the 20/20 cap.
He also looked at a plan proposed by William Gale, co-director of the Urban-Brookings Tax Policy Center and director of the Retirement Security Project at The Brookings Institution, that would modify the existing tax treatment of both worker and employer 401(k) contributions and introduce a flat-rate refundable credit that would serve as a federal matching contribution into a retirement savings account.