Cap on Retirement Accruals Would Lead to Plan Terminations
The following is a statement from Brian H. Graff, Executive Director & CEO of The American Society of Pension Professionals & Actuaries (ASPPA) in response to a proposal in President Obama’s budget set to be released next week.
“A proposed savings cap of $3 million— a cumulative limit on individual tax-favored retirement saving accounts, including IRA rollovers— is said to be included in President Obama’s budget proposal.
We vigorously oppose this proposal not only because it would unfairly punish good savers, but because it is a ‘plan killer.’ As business owners reach the cap, they will lose their incentive to maintain a plan, and either shut down the plan or greatly reduce benefits. This would leave workers with a greatly diminished plan or without any plan at all.
More Americans save at work through an employer sponsored retirement plan than in any other way. Proposals that cut incentives for business owners threaten this system that is helping millions of workers save for retirement. We urge the President to drop this proposal from the budget, and remove this threat to American workers’ retirement security.”