New York City Bar Committee Makes Recommendations to Strengthen Retirement Security
In a letter, the committee, comprised of legal professionals representing employee benefits stakeholders, expressed concern that legislative shifts aimed at funding tax cuts or addressing Social Security deficits might undermine the incentives driving retirement savings.
In a July 3 letter, the New York City Bar Association’s Committee on Employee Benefits and Executive Compensation called on the Department of the Treasury, the IRS and leaders in Congress to prioritize the stability and expansion of the U.S. private retirement system in the wake of the “Big Beautiful Bill,” which included little for the sector.
The committee, comprised of legal professionals representing employee benefits stakeholders, expressed concern that legislative shifts aimed at funding tax cuts or addressing Social Security deficits might undermine the incentives driving retirement savings—a move they argue would endanger Americans’ financial futures.
The principal authors of the letter were attorneys Carol I. Buckmann, Kathleen A. Drapeau, Matthew L. Eilenberg, Evan Giller, John M. Harras, Barry L. Salkin and Rania V. Sedhom.
“Retirement plan benefits should not be viewed as a means to fund tax cuts or the Social Security system,” the committee wrote. Citing data from multiple sources, including the Investment Company Institute and the Employee Benefit Research Institute, the letter warned that destabilizing tax incentives would erode retirement readiness for millions of workers.
The committee outlined nine core policy recommendations, urging lawmakers and the administration to:
- Maintain stability and simplicity: Emphasize continuity in retirement tax policy to avoid burdening plan sponsors with ever-changing compliance demands;
- Exempt new retirement legislation from regulation freezes: Request guidance on the Setting Every Community Up for Retirement Enhancement Act of 2019 and the SECURE Act 2.0 of 2022, stressing that delays in “guidance is necessary for proper operation of plans, and failure to provide safe harbors and basic rules for administering the new provisions will deter new plan adoption and plan continuation;”
- Keep Roth contributions optional: Oppose mandatory Rothification for high earners, arguing it imposes tax burdens without guaranteed benefits. Specifically, the letter points to the complexity created for plan sponsors in Section 603 of SECURE 2.0, which requires employees earning more than $145,000 to make catch-up contributions on a Roth basis, and urged it be reconsidered;
- Allow 403(b) plans to use collective investment trusts: Support the Retirement Fairness Act to enable cost-effective investment options for nonprofit and education sector employees;
- Promote supplemental savings options: Expand support for health savings accounts, emergency funds and nonqualified plans to bridge savings gaps;
- Encourage lifetime income products: Seek Department of Labor guidance to simplify the inclusion of annuities and similar tools in defined contribution plans;
- Expand pooled employer plans: Push for regulatory clarity to make low-cost, multiple employer plans more accessible to small businesses;
- Enhance financial literacy: Propose a tax credit for employers that provide robust, personalized financial education programs; and
- Protect existing tax benefits: Urge lawmakers not to weaken current employer-sponsored retirement plan incentives.
The committee emphasized that retirement security has historically received bipartisan support and should remain a shared priority. The letter was addressed to leadership on the relevant committees in both chambers of Congress and relevant departments across Treasury, Labor and the IRS.
“Highlighting the importance of saving in a 401(k) plan will lead to better long-term retirement savings and avoid plan leakage (pre-retirement withdrawals) that can result in adverse tax consequences for the employee and a higher 401(k) plan administrative fee for employers,” the letter stated.