Virtual Session Examines TCJA Threats and Opportunities
The ink is barely dry on the Tax Cuts and Jobs Act (TCJA) — it’s been on the books for less than two months. Panelists at a session of ASPPA’s Feb. 2 Tax Virtual Conference offered their take on what the new law means to retirement plan professionals.
The session, “Retirement Plan Threats and Opportunities
,” featured a discussion by Adam Pozek, ASPPA 2018 President; Bob Kaplan, American Retirement Association Director of Technical Education; Bill Karbon, EVP and Director of Compliance with CBIZ Insurance Services; and Dan King, a Senior Manager in the National Tax Office of CohnReznick.
The session centered around an examination of the effect of the TCJA’s provisions on a married couple under a variety of scenarios: filing separately or jointly, as holders of SIMPLE IRAs, as participants in a traditional 401(k), as participants in a safe harbor 401(k) plan, as participants in a plan with profit sharing and that offers a cash balance option, as participants in a plan conservatively managed, as participants in a plan that is aggressively managed and as employees at an employer that has no retirement plan.
More Reason to Have a Plan
“The good news is that there is no scenario here in which it is detrimental for a company to have a plan,” said Karbon, noting that it is “neutral or beneficial” for an employer to do so under the new law. Pozek made a similar observation, saying that in the scenarios posed, “we have shown that plan sponsors will be break-even at worst,” if not ahead.
And, Kaplan reminded attendees, “there are other reasons to have a plan,” even if an employer is “at the break-even point” in offering. While acknowledging that there are “still underlying variables,” he said that the scenarios “give a good picture that it is still worthwhile to offer a plan.”
All in this Together
With the changes made by the TCJA, “more than ever before” there is a “need to view our clients, their CPAs and tax attorneys as partners,” said Pozek. It’s a “great opportunity to partner, to educate” and not consider other service providers as adversaries. “There are a lot of opportunities to collaborate here,” he said. Kaplan expressed a similar view, noting that the TCJA’s effect on retirement benefits can spell an opportunity “to be really proactive with our clients.”
Karbon suggested that service providers may want to take advantage of the opportunity to let their clients know that calculations will be different under the new tax law. Panelists were careful to draw a distinction between giving advice and sharing general knowledge, however. “We don’t want to be in a position of giving tax advice,” cautioned Kaplan.
And Kaplan noted the overall beneficial effect cooperation can have, since it can advance the notion of offering a retirement plan. He remarked that the changed tax treatment “reinforces the idea of the partnership so we can talk about the benefits of a retirement plan.”