A busy week for federal recognition of problems with America's retirement system has brought another proposal, pushing for retirement plan-friendly changes to the tax code.
Brian H. Graff, CEO and executive director of ASPPA, weighed in with the organization's support for the so-called "Sense of the Congress" resolution filed Thursday by Congressmen Jim Gerlach (R-Pa.) and Richard E. Neal (D-Mass.).
"ASPPA applauds the more than 100 Members of Congress from both sides of the aisle who have voiced their support for the employer-based retirement system by co-sponsoring the 'Sense of the Congress' Congressmen Gerlach and Neal filed today," Graff said, in a statement. "The resolution recognizes that current tax incentives for retirement savings have been successful at helping American workers save for a financially secure retirement, and that retirement savings tax incentives should play an important role in any reformed tax code.
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"Employer-sponsored retirement plans such as 401(k) plans are a crucial component of our nation's retirement system. Simply put—more Americans save at work than in any other place. Workers earning between $30,000 and $50,000 are more than 14 times more likely to save for retirement at work than through an individual IRA.
"Today, approximately 670,000 private-sector defined contribution plans cover 67 million participants and more than 48,000 private-sector defined benefit plans cover 19 million participants thanks in large part to these incentives.
"The current tax incentives for retirement savings encourage employers to offer plans and encourage individuals to save for retirement through these arrangements. These incentives are an investment in our future in more ways than one. Encouraging retirement savings not only helps American families gain a secure retirement, but the fact that these incentives are deferrals also means the 'cost' of these incentives will be recovered when income tax is paid on contributions and investment earnings distributed from these plans when today's workers become tomorrow's retirees.
"As Congress considers ways to reform and simplify the tax code, we are pleased that these Members recognize the critical role tax incentives play in helping American workers achieve a secure retirement."
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