AICPA comments on simplifying employer-provided retirement plan rules.
The proposed changes do not encourage small employers to offer retirement savings plans to their employees, but may encourage those that currently offer retirement plans to terminate them. This would thwart the Administration's goal of promoting more retirement savings.
The Administration's proposal would create three new retirement savings accounts: (1) Retirement Savings Accounts (RSAs); (2) Lifetime Savings Accounts (LSAs); and (3) Employer Retirement Savings Accounts (ERSAs). RSAs and LSAs would allow individuals to invest up to $7,500 in 2003 (adjusted annually) and permit account gains to grow tax free. LSA withdrawals could be made tax free, at any time and for any purpose. RSA withdrawals would only be tax free if the holder was at least age 58. ERSAs are modeled after Sec. 401(k) plans and would replace all employer plans (including Sec. 401 (k) plans, simplified employee pensions and savings incentive match plans for employees (SIMPLE) IRAs).
The full set of comments may be found at www.cpa2biz.com/Resource Centers/Tax/budget_critique.htm. For further assistance, contact Lisa Winton at (202) 434-9234 or firstname.lastname@example.org.
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|Author:||Winton, Lisa A.|
|Publication:||The Tax Adviser|
|Date:||Apr 1, 2003|
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