With fiscal cliff negotiations putting tax incentives for retirement savings potentially on the chopping block, 11 senators have voiced their support for the employer-based retirement system by joining forces on a Sense of the Congress resolution introduced Dec. 6
The Senate resolution, introduced by Sen. Richard Blumenthal, D-Conn., recognizes that current tax incentives for retirement savings have been successful in 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.
The 10 senators who joined Blumenthal are Johnny Isakson, R-Ga.; Chuck Grassley, R-Iowa; Rob Portman, R-Ohio; Jon Tester, D-Mont.; Daniel Akaka, D-Hawaii; Sherrod Brown, D-Ohio; Benjamin Cardin, D-Md.; Jeff Bingaman, D-N.M.; Kay Hagan, D-N.C.; and John Boozman, R-Ark.
“A reformed and simplified tax code should include properly structured tax incentives to maintain and contribute to such plans and strengthen retirement security for all Americans,” Blumenthal and Isakson said in the resolution.
The Coalition to Protect Retirement, which represents groups that sponsor and manage retirement plans, praised the resolution as a strong reaffirmation of the importance of the private-sector retirement plan system and the role it plays in assuring the financial security of Americans when their working days are over.
Coalition members include the American Council of Life Insurers, American Society of Pension Professional and Actuaries, ERISA Industry Committee, ESOP Association, Insured Retirement Institute, Plan Sponsor Council of America, Securities Industry and Financial Markets Association and the Society for Human Resource Management.
“Actions taken to reduce the national debt and reform the tax code should not be done at the expense of workers and retirees,” the coalition said in a release. “Tens of millions of baby boomers will reach retirement age in the coming years. Government policy should focus on helping them achieve financial security and independence in retirement. The incentives in the current tax code are an investment in the future, helping assure that retirees will not suffer from financial need and look to the government for help.”
The resolution notes tax incentives for retirement savings benefit Americans of all income levels. “In 2009, 79% of federal tax incentives for defined contribution plans were attributable to taxpayers with less than $150,000 of adjusted gross income, and 65% were attributable to taxpayers with less than $100,000 of adjusted gross income,” the resolution says.
“The current incentives for retirement savings represent good economic and tax policy, and they benefit the people who need it most. That’s why we strongly encourage all members of the Senate to support this resolution,” the coalition said.