Retirement plan incentives likely to grow to $785 billion
By Dan Cook
As tax incentives directed at employer-sponsored retirement plans multiply, the dollar figures attached to those incentives is also rising apace.
According to the latest estimates from the federal Joint Committee on Taxation, direct contribution plan incentives alone over the coming five years will cost the Treasury $399 billion.
Direct benefit plan incentives during that period will total $248.3 billion, while self-employed pension plans will tack on another $52.1 billion.
Total cost of these incentives in revenue to the government: $785.1 billion.
In an article for the National Association of Plan Advisors, Andrew Remo, NAPA’s congressional affairs manager, offered these observations:
By 2017, the annual cost of total savings in employer-provided retirement plans ($171.5 billion) will be more than the tax exclusion for employer-provided health insurance ($163.6 billion).
In that same year, the annual cost of the tax incentives for saving in just DC plans ($98.9 billion) will eclipse that of the tax deduction for interest payments on home mortgages ($87.8 billion).
“These numbers amount to a giant target on the back of our industry, a target that will only grow larger,” Remo cautions. ”There are already numerous policy proposals floating around Washington, D.C. to scale back the current incentives to save through the workplace. These proposals are being peddled by critics of the current system who argue that these incentives only benefit the rich, who don’t need the help to save.
“These data are a reminder for us to remain vigilant in educating the decision-makers that these incentives are a deferral of income, not a permanent loss to the Treasury that serves, along with Social Security, as the backbone of a secure retirement for tens of millions of Americans.”
Originally published on BenefitsPro.com