April 15, 2015
NR 2015-8

For additional information:
Jason Hammersla
office 202-289-6700 / cell 202-422-4652

Council statement to Senate Finance Committee working group:

Successful employer-sponsored retirement plan coverage built on vital tax incentives

WASHINGTON, DC — "Workplace retirement plans successfully assist tens of millions of families in accumulating retirement savings. This allows for a more financially secure retirement and provides sustainable health and financial well-being," said Lynn Dudley, senior vice president, global retirement and compensation policy for the American Benefits Council. "As Congress considers retirement issues, in a tax reform context or otherwise, it should build on the existing system to continue helping individuals prepare for a financially secure retirement. We applaud Chairman Hatch and the Senate Finance Committee's attention to the importance of good retirement policy."

"Too often, retirement legislation is driven by considerations unrelated to retirement policy - principally to raise revenue to pay for other initiatives. When this happens the result has almost always been unnecessary complexity and costs - and, worse yet, direct harm to Americans' financial well-being and retirement prospects," said the American Benefit Council's statement to the U.S. Senate Finance Committee's Tax Reform Working Group on Savings and Investment, submitted on April 15.

"It is critical to remember that retirement savings incentives in the tax code are simply deferrals of income tax that would otherwise be paid on contributions. They are not exclusions, as is the case with other types of "tax expenditures" with which they are often erroneously compared," said Dudley.

The Council's statement to the Savings and Investment Working Group aims to explain the importance of the employer-sponsored retirement system for workers' savings and to demonstrate the true value of tax-deferred retirement savings on personal financial security, broader economic growth and future tax revenues.

"These savings play a significant role in the U.S. economy and relieve pressure from government programs," Dudley noted. "The current system of tax incentives for defined contribution plans benefits workers all along the income spectrum, including low-income workers. We believe it is critical to every employee's financial security that any tax-reform measures preserve these strong retirement savings incentives for all Americans."

The Council statement also provides targeted policy recommendations that are included in the Council's recently released strategic plan, A 2020 Vision. The recommendations would improve outcomes in the current system and empower individuals to achieve health and financial well-being in retirement. "Any public policy reforms, including changes to retirement savings tax policy, should focus on addressing isolated coverage gaps and helping individuals overcome savings obstacles. They should not disrupt the gains made - and yet to be made - by the vast majority of plan participants," Dudley said.

The Council's statement to the Senate Finance Committee working group is available here. For more information on retirement policy issues, or to arrange an interview with Lynn Dudley, senior vice president, global retirement and compensation policy, please contact Jason Hammersla, Council director of communications, at jhammersla@abcstaff.org or by phone at 202-289-6700 (office) or (202) 422-4652 (mobile).

 

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The American Benefits Council is the national trade association for companies concerned about federal legislation and regulations affecting all aspects of the employee benefits system. The Council's members represent the entire spectrum of the private employee benefits community and either sponsor directly or administer retirement and health plans covering more than 100 million Americans.