Like many other industry groups, the American Society of Pension Professionals and Actuaries is redoubling its effort to communicate with federal lawmakers at a time when the massive federal budget deficit is causing Congress to consider new ways to produce revenue
Like many other industry groups, the American Society of Pension Professionals and Actuaries is redoubling its effort to communicate with federal lawmakers at a time when the massive federal budget deficit is causing Congress to consider new ways to produce revenue.
The group sent more than 500 members to Capitol Hill last Tuesday to talk to members of Congress and their staff members about issues ranging from retirement savings tax breaks to pension reform.
“It's a record by several hundred,” Brian Graff, ASPPA's executive director and chief executive, told attendees at the group's annual conference a few days earlier, in a reference to the number of people set to participate in the “March on the Hill” activity.
The annual meeting, which attracted 1,500 ASPPA members, was held last week at National Harbor in the Maryland suburbs of Washington.
Mr. Graff said he doesn't expect the so-called deficit supercommittee to produce substantial tax reform in the proposal it must introduce by Nov. 23.
But what the panel might do is instruct the House Ways and Means Committee and the Senate Finance Committee to come up with tax reform plans next year and set an expedited calendar for their consideration.
“That's where we have a lot of danger,” Mr. Graff said.
Members of both parties in Congress have expressed support for an effort to lower individual tax rates and broaden the tax base. Doing so likely would require curbing or eliminating so-called tax expenditures, such as the deferrals that are permitted for retirement savings plan contributions.
TAX DEFERRALS
This year, tax deferrals for employer-provided retirement plans were expected to total $105.8 billion, while individual retirement accounts would add up to $16.3 billion, according to the congressional Joint Committee on Taxation.
The presidential deficit commission and several other groups have offered plans that would curb retirement savings tax expenditures. Among the ideas: capping 401(k)-type contributions to a total of between $14,850 and $20,000 from employers and individuals combined, limiting IRA contributions to $4,500 and converting tax-favored contributions into refundable tax credits.
Although major tax reform isn't likely to occur before 2013, ASPPA and other groups are trying to lay the groundwork now by promoting their ideas or stopping ones they find objectionable.
“Welcome to Crazy Town,” Mr. Graff told the ASPPA convention, referring to Washington.
“These proposals coming out of academia have no clue about reality. Unless we're out there putting out what's wrong with this thing, it's going to continue getting more enthusiasm,” Mr. Graff said.
Members of ASPPA heading to Capitol Hill were armed with talking points in support of the current system of tax-favored retirement savings plans. They were instructed about how to debunk what ASPPA calls “myths” about retirement tax incentives, including assertions that they represent “lost revenue” and that only the “wealthy” benefit from them.
Above all, in meetings with lawmakers and their aides, ASPPA members emphasized that workplace savings programs are vital to retirement security.
“It's the only way we've gotten Americans to save on their own,” Mr. Graff said.
Email Mark Schoeff Jr. at mschoeff@investmentnews.com
