According to a White House fact sheet, as reported by NAPA Net Staff, the White House is working on a series of retirement tax reform proposals that would give 30 million additional workers access to workplace savings opportunities. Wealthy individuals will foot the bill for these initiatives, by closing retirement tax loopholes for the wealthy, specifically, reintroducing an item from last year’s budget that would impose a retirement savings cap of $3.4 million.
- Requiring employers with more than 10 employees that do not offer a workplace retirement plan to automatically enroll their workers in an IRA. Of note, employees could opt out if desired.
- Provide tax cuts for auto-IRA adoption, as well as businesses that offer employer plans or switch to auto-enrollment. The proposal would allow any employer with 100 or fewer employees that offers an auto-IRA a $3,000 tax credit. The President also proposes to triple the existing “start up” credit, so small employers electing to start such a program would receive a $4,500 tax credit. Small employers that already offer a plan and decide to add auto-enrollment would receive an additional $1,500 tax credit.
- Requiring employers that offer plans to allow voluntary contribution for part-time workers. Employers that offer plans must allow employees who work for at least 500 hours per year or more to make voluntary contributions to the plan.
asppa.org; January 20, 2015.