According to a statement from Brian H. Graff, executive director and CEO of The American Society of Pension Professionals & Actuaries (ASPPA), the commission’s recommendations include reducing the defined contribution limit by more than half. Further, Graff said,tax free contribution limits would be cut from the current limit of $49,000 to a new cap of $20,000 or 20% of pay. If adopted by Congress, Graff warned that the plan would effectively eliminate employer sponsored profit-sharing plans, shifting responsibility for retirement savings to workers.
“We urge Congress to carefully consider the impact of the Commission’s recommendations on tax incentives for employer-sponsored retirement plans, Graff said in the statement. “We reiterate our call for Congress not to rob America’s future retirees to fund the deficit gaps of today.”
Meanwhile, AARP Executive Vice President John Rother was equally blunt: “The latest report on deficit reduction would actually increase the health and economic insecurity of millions of Americans. As we wait for the President’s Fiscal Commission to present their report to the President, AARP believes strongly that the commission and our elected leaders need to more fully assess the impact of its recommendations on real people, and not strictly as a budget exercise.”
The Fiscal Commission’s final report contains a number of politically volatile recommendations in an effort to pare the federal government’s looming deficit (see Panel Recommends Cuts in Employer Health Care Tax Treatment).