It appears some last-minute amendments have largely removed controversial provisions from the Senate’s version of tax reform legislation that would have had a big impact on governmental 457 and nonprofit 403(b) plan sponsors.
With the passage of the Senate’s version of tax reform, the stage is set for a bicameral conference committee process through which a select group of legislators will try to rectify the House and Senate bill texts.
Analysts warn it’s too soon to tell what middle ground, if
any, may be reached between the House and Senate; for now 401(k) retirement
plan deferrals appear to be mostly unaltered, but other important changes are
Industry observers are pleased to see the overall deferral
limits for 401(k) plans left unaffected, but there are still some important changes
included in the bill concerning the treatment of DC account loans, hardship withdrawals, nondiscrimination
testing, and more.
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.”
From a rapidly evolving recordkeeping provider landscape to
a potential wholesale rewrite of the tax treatment of retirement assets,
today’s environment puts advisers and their clients in a constant
state of flux.
Speaking with a recent winner of the Plan Adviser Mega Team of
the Year designation, Elizabeth Bell offered a frank, behind-the-scenes look at
the ongoing legislative discussions surrounding health care and tax reform.