SHRM Newsletter: Employer-Sponsored Pension Legislation Action Alert
November 4, 2011
This is Utah SHRM Legal-mail no. 2011-20 prepared for Salt Lake SHRM, the Human Resources Association of Central Utah (HRACU), the Northern Utah Human Resources Association (NUHRA), the Color Country Human Resources Association (CCHRA), the Bridgerland Society for Human Resource Management and Utah at-large members of the national Society for Human Resource Management (SHRM).
National SHRM- Federal Legislative Action Alert
YOUR ASSISTANCE IS NEEDED! Representatives Richard Neal (D-MA) and Jim Gerlach (R-PA) will introduce a bi-partisan House Concurrent Resolution the week of November 21 that highlights the important role employer-sponsored pension plans play in helping Americans save and plan for retirement. Please call or email your representative and ask him/her to co-sponsor this measure!
This summer, President Obama signed into law legislation that creates a bipartisan, bicameral Congressional Joint Select Committee on deficit reduction. The committee, known as the “Super Committee,” is charged with reducing the federal debt by at least $1.5 trillion during the next 10 years by looking at current spending and tax code policies. Because of their tax-deferred status, employer-provided benefits such as retirement and health care plans may come under scrutiny by the Super Committee.
Employer-provided retirement plans are a key component of our nation’s retirement system and produce significant retirement benefits for America’s working families. Together with Social Security and individual savings, employer-provided retirement plans produce significant retirement benefits for America’s working families. There are approximately 670,000 private-sector defined contribution plans covering 67 million participants and over 48,000 private-sector defined benefit plans covering 19 million participants.
Employer-sponsored health care and retirement benefits, because of their tax-deferred status, create the largest annual loss in revenue to the federal treasury. As a result, it is anticipated that public policy efforts to reform the tax code and bring down the federal deficit will involve an examination of employer-sponsored benefits, including retirement plans, health care benefits and educational assistance programs. Given the large loss of revenue to the U.S. Treasury, employer-sponsored pension plans are an attractive revenue-raising target for Congress.
SHRM believes that a comprehensive and flexible benefits package is an essential tool in recruiting and retaining talented employees. Every American employee should be provided the opportunity to save for retirement. The government should facilitate and encourage voluntary employer-sponsored plans, as well as individual savings through consistent tax incentives and simplified regulations.
SHRM supports the House Concurrent Resolution to be introduced by Rep. Neal and Rep. Gerlach. The resolution declares the benefits and importance of employer-sponsored retirement plans.
The House Concurrent Resolution has not yet been introduced, and therefore, has yet to be assigned a number. However, the draft legislation has been sent to every member of the House of Representatives. Please ask your Representative to co-sponsor this measure prior to introduction! This measure states many important facts, most importantly:
- The current tax incentives for retirement savings provide important benefits to Americans to help plan for a financially secure retirement;
- There are approximately 670,000 private-sector defined contribution plans covering 67 million participants and over 48,000 private-sector defined benefit plans covering 19 million participants;
- $4.7 trillion is held in 401(k), 403(b), 457 and similar defined contribution plans, $2.3 trillion is held in private defined benefit plans, and another $4.9 trillion is held in Individual Retirement Accounts, largely consisting of funds rolled over from employer-based retirement plans;
- During 2000 through 2009, employers contributed almost $3.5 trillion to public and private retirement plans;
- Tax incentives are an important impetus for individuals to save and plan for retirement and for employers to offer plans in a voluntary system.
SHRM needs your help to share the HR perspective with the House of Representatives on this important retirement issue.
To write your U.S. representative using SHRM's HRVoice program, follow these steps:
- Log onto the SHRM Advocacy Action Center by clicking HERE;
- Please select the featured federal alert highlighted in blue and to the left by clicking the "Take action here" tab at the bottom of the alert; and,
- Be sure to include your complete home mailing address.
For questions regarding this resolution, please contact Kathleen Coulombe, SHRM’s Senior Associate, Government Relations at firstname.lastname@example.org.
If you encounter any problems with this site, please contact David Lusk, SHRM's Senior Associate, Member Advocacy, at 703-535-6158.
Written by: Employment Attorney, Michael Patrick O'Brien
Utah State and Salt Lake SHRM legal director
Legal-mail is a legal and legislative update service sent out about twice a month to various Utah SHRM members and chapters. As a courtesy to SHRM, the Utah law firm of Jones Waldo Holbrook & McDonough P.C. underwrites the costs of the service. If you have any questions or comments, please contact Michael Patrick O'Brien.
Disclosure: These updates are merely updates and are not intended to be legal advice. Receipt of this information does not create an attorney-client relationship.