The ERISA Industry Committee on Tuesday advised the Senate to proceed with extreme caution when making any changes to the employer-sponsored retirement system.
ERIC, which submitted comments to the Senate Finance Committee regarding retirement tax incentives, argues that the current employer-sponsored system needs to be maintained and should be enhanced, and that steps taken by the Senate Finance Committee regarding the retirement system must be steps that promote retirement savings.
Any changes that could intentionally or unintentionally undermine Americans’ attempts or willingness to save for retirement are of great concern, according to ERIC.
ERIC sees changes to the tax treatment of employer-sponsored plans as likely endangering the retirement security of millions, as well as causing unforeseen consequences with how retirement assets function in capital markets, damaging the prospects of a secure retirement for those looking to retire in the future.
“The current system involves a delicate balance between the needs of companies and their employees,” Kathryn Ricard, ERIC senior vice president of retirement policy, said in a statement. “Uncertainty surrounding the rules and regulations of retirement plans undermines the ability of employers to offer and maintain a plan, and risks undercutting the success of the system.”
ERIC sees flexibility in plan design and funding as being fundamental to maintaining a healthy retirement system. The organization is concerned that what it calls a “one-size-fits-all approach” to regulations on the part of Congress will fail to account for the challenges faced by employers trying to offer benefits to their employees.
Due to shifts in the economic landscape and the new and different ways in which Americans work, ERIC argues that Congress should be doing all it can to promote the sponsorship of retirement plans.
“At a time when retirement savings are not enough to meet future needs, Congress should do all it can to protect and enhance the retirement system to allow future generation to properly prepare for retirement,” ERIC said in a press release.
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