So what is it? In a nutshell, the proposal would completely eliminate the deduction for employee contributions to any defined contribution plan and any employer contributions to such plans would be current taxable income to the employee (and subject to FICA tax as well). The tax revenue generated from this would be used to fund a new government matching program for qualifying savings. Employee and employer contributions to a DC plan (and individual contributions to an IRA) would qualify for a 30 percent government matching contribution, which would be contributed to the employee’s account (or IRA). (The details for how this would happen are conveniently not disclosed.)
Does anyone believe a government is a better steward for your retirement savings than you? Do you truly trust any government with your financial future?
Please comment or call to discuss.
- Boost Your Retirement Savings (turbotax.intuit.com)
- The Use of ERISA § 3(38) Investment Managers in Defined Contribution Plans (401kplanadvisors.com)
- Smart Investor – Why Fees Matter for 401(k) Plan Fiduciaries, But Not Defined Benefit Pension Plans (401kplanadvisors.com)