From the Executive Director
With the April 15 deadline just passed, I figured this is a good time to update you on the prospects for tax reform. Back in January, I told you that this time, in this Congress, I put the prospects at over 90%. I said it’s not if, but when. Well, I would like to retract that, please. Tax reform is very much on the table, and it is not time to relax about its prospects, but now it’s more like 50/50 than 90/10. Since health care is still declared to be first, and there still is not agreement on key proposals (border adjustment tax, anyone?), this could take a while. If it happens, we are likely to be a revenue source (again), so ARA GAC staff are not only watching it closely, but actively engaged in encouraging Congress to make sure that, whatever they do, there are still tax incentives to encourage employers to sponsor retirement programs.
As you have all heard by now, workers making between $30,000 and $50,000 per year are 15 times more likely to save at work than on their own. That is the reason these incentives are in place. We have a good story, but we can’t get tired of telling it.
Unfortunately, there is an impending deadline that is going to put us in danger of more PBGC premium increases. The “continuing resolution” (CR) that has kept the government running since the fiscal year began last October is about to run out (again), and Congress needs to pass a budget resolution, or another CR, to keep the doors open. Budget deals have been the main source of premium increases in recent years. Andy Remo, ARA’s Director of Legislative Affairs, has been on the Hill with other representatives of other concerned organizations and employers, asking Congress to please stop using PBGC premiums, which never are part of general revenues, to pretend to fund general government expenses. There is legislation — the Pension and Budget Integrity Act (PBIA) — that would ensure that these games would not be played. In the House it’s HR 761, with Rep. Renacci (R-OH) as lead sponsor, but co-sponsorship is down from last year — not a good sign. Sen. Enzi (R-WY) has filed the same bill in the Senate, and has two other co-sponsors. I don’t expect this legislation to pass, but lobbying for it is an excellent way to talk to other congressional offices about just how wrong it is to penalize responsible employers for sponsoring a DB plan just to play games with the budget.
So stay tuned. Unfortunately, if anything happens, it probably won’t be something to high-five about. But ARA and ASPPA and ACOPA GAC are working for good outcomes.
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