Tax incentives for employers to offer retirement plans to their employees would be eliminated under a plan in a draft report from the National Commission on Fiscal Responsibility and Reform, according to the American Society of Pension Professionals & Actuaries (ASPPA).
“As drafted, one of the options listed in the proposal would eliminate the tax incentive for employers to offer retirement plans to their employees—which ultimately hits low and moderate income workers the hardest,” said Brian H. Graff, executive director and CEO of ASPPA (www.asppa.org).
“The proposed ‘Zero Option Plan’ would decimate the savings rate by eliminating tax incentives for contributing to employer-sponsored retirement plans, such as 401(k) plans, likely triggering mass terminations of company retirement plans—directly impacting a worker’s ability to save for retirement,” he added.
“The 401(k) acts as the primary savings vehicle for most Americans and eliminating these tax incentives would strip them of critically important benefits and protections provided by the Employee Retirement Income Security Act of 1975 (ERISA),” Graff said, adding that, if the recommendations are enacted, “the retirement security of American workers will greatly suffer.”
The draft report can be downloaded by visiting Fiscalcommission.gov and clicking on “CoChairs’ Proposal.”