Uncle Sam’s 2014 budget: Will it cap retirement savings? — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily

Uncle Sam’s 2014 budget: Will it cap retirement savings?

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in Compensation and Benefits,Human Resources

With the sequester gripping Washington, D.C., all kinds of tax reforms are on the table. Recent FY2014 budget proposals by President Obama include a major change for retirement savers: A new $3 million limit would apply to assets in qualified retirement plans such as 401(k)plans, as well as defined-benefit pensions and IRAs.

Assets in excess of the cap would lose tax-preferred status.

Details of how this would work haven’t been released, but the Obama administration projects that the cap would bring in $9 billion in additional revenue over the next decade.

The Employee Benefit Research Institute estimates that only 0.03% of current retirement funds exceed $3 million.

Outlook: 50/50. Expect congressional committee hearings, but with so many moving parts in the federal budget process, the retirement cap might not make it into legislation.

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