The American Retirement Association says that tax reform could be a disincentive for small businesses to offer retirement plans; however, as one reader shares, there are counter considerations having to do with Roth 401(k) options that could mitigate some of the concern.
One clear way to help prevent retirement plan leakage is to help families cope with financial shocks and income volatility in the short term; one way to do this is to encourage use of “sidecar accounts.”
The group also says the primary motivation of most
corporations in eliminating defined benefit plans has been to improve both the
level and predictability of their quarterly earnings; it has not been to
provide a superior benefit to their employees.
It appears 401(k) contributions won’t be affected by tax
reform, but one industry veteran warns the process is still only just beginning—and
that tax uncertainty is “unfortunately not likely to ever go away.”
The department believes an oversight bureau, created to assess the financial strength of annuity providers, would help employers and advisers become more comfortable including annuities in retirement plans.
Nominating a plan sponsor client is a great way to show appreciation
and highlight important best practices that are improving outcomes for defined
contribution and pension plan participants. Nominations for all types of
retirement plans will be considered, so don’t delay.