The majority of Americans oppose changing the tax rules that govern retirement savings, according to a survey by the Coalition to Protect Retirement, a group of America’s leading supporters of retirement savings plans.
Eighty-seven percent of respondents and 95 percent of those who have a tax-deferred retirement plan like a 401(k) said they believe retirement savings should be “off limits” to Congress and not a source of new revenue for the government.
The survey, which was conducted in mid-October, shows widespread support across political parties for maintaining the current tax treatment for retirement savings vehicles, such as 401(k) and 403(b) plans and IRAs.
The current tax incentives have helped Americans save for retirement and have increased the number of workers covered by retirement plans, the Coalition said. More than 67 million people participate in private-sector defined contribution plans and Americans have saved nearly $21 trillion for retirement.
Tax incentives benefit individuals in all income levels, the Coalition said, particularly middle-income earners. More than 70 percent of American workers who earn between $30,000 and $50,000 a year contribute to a retirement savings plan if it is offered at work.
The Coalition added that employers play an increasing role in helping workers prepare for retirement. Between 2000 and 2009, employers contributed nearly $3.5 trillion to public and private retirement plans. It believes that changing current incentives would adversely impact employer-sponsored plans, contributions and retirement security for 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. “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.”
The Coalition to Protect Retirement believes that Congress should encourage retirement savings for American workers through the preservation of current tax incentives. The Coalition is composed of the following associations: American Benefits Council, American Council of Life Insurers, American Society of Pension Professionals and Actuaries, The ERISA Industry Committee, 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.