Printer Friendly

AICPA comments on Bush Administration's proposals on retirement plans.

The AICPA provided comments on President Bush's Fiscal Year 2005 budget proposal as it pertains to efforts to simplify the employer-provided retirement plan rules. While applauding the effort in general, the AICPA expressed its concern that the simplification efforts may have unintentional, broadly applicable consequences.

Specifically, the AICPA said that it believed the proposed changes not only do not encourage small employers to offer retirement savings plans for their employees, but may actually encourage small employers that currently offer retirement plans to terminate their retirement programs. Burdensome reporting requirements stemming from the consolidation of plans as proposed would be a likely culprit.

Moreover, the AICPA said, any proposal that requires employers to redesign their plans would likely decrease sponsorship of retirement plans among small employers. Establishing and maintaining qualified retirement plans is very costly for employers. Not only will plan documents need to be revised, the cost of a ruling must be added, all employee communications must be changed, new software must be developed, plan administrators must be reeducated, and the Department of Labor and the Internal Revenue Service will need to re-invent the filings, forms and procedures by which they monitor compliance.

Simplification, however, will encourage employers to keep retirement plans, according to the AICPA. As an example, the AICPA cited simplifying the definition of compensation and repealing the top-heavy discrimination rules which would ease reporting requirements.

To read the comment letter from Tax Executive Committee Chairman Robert A. Zarzar, go to https://www.cpa2biz.com/ ResourceCenters/Tax/Employee+Benefits/ fy2005.htm.

Lisa Winton, lwinton@aicpa.org
COPYRIGHT 2004 American Institute of CPA's
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2004, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

Article Details
Printer friendly Cite/link Email Feedback
Title Annotation:legislation
Author:Winton, Lisa
Publication:CPA Letter
Article Type:Brief Article
Geographic Code:1USA
Date:Apr 1, 2004
Words:258
Previous Article:AICPA Webcasts offer high-quality CPE at your desktop.
Next Article:Disciplinary actions.
Topics:


Related Articles
AICPA savors success in new tax cut bill.
AICPA comments on simplifying employer-provided retirement plan rules.
TEC initiatives.
TEC initiatives.
TEI welcomes spring with blizzard of advocacy activity: FSC/ETI repeal, international reform, simplification, and host of other congressional...
Happenings at February Board of Directors' meeting.
TEC initiatives.
TEC initiatives.
Promises to keep.
TEC initiatives.

Terms of use | Copyright © 2017 Farlex, Inc. | Feedback | For webmasters