Fee Disclosure Not in Senate Tax Extenders Bill

Some of the pension changes incorporated in pending legislation in the House may not make it to the Senate version.

According to published reports, Senate Finance Committee Chairman Max Baucus’ (D-Montana) substitute amendment (S. Amdt. 4301) now pending in the Senate does not include the 401(k) fee disclosure rules included in a version passed by the House (see “House Passes Fee Disclosure and Pension Funding Relief Bill“).  Additionally, the Baucus amendment scales back a legislated tax increase on investment managers’ carried interest earnings.

The Senate amendment under consideration would require that 65% of carried interest earned by investment fund managers would be taxed at ordinary income tax rates (up to 39.6%), rather than the capital gains tax rate of 15% currently applied (the rest would be taxed at capital gains rates if the investment is held longer than a year).  The version passed in the House would have taxed 50% of carried interest income at ordinary income rates, but only up till 2013, when 75% would be subjected to those higher rates.

It is not yet certain what will emerge from the Senate, or how that might be reconciled with the House version.