New England Council Urges Congress to Preserve Retirement Savings Tax Incentives
NEC joins with other financial services industry leaders to protect incentives for individual saving
BOSTON (June 21, 2011)– The New England Council, an alliance of businesses, academic and health institutions, and public and private organizations throughout New England, is urging Congress to preserve tax incentives that encourage individual retirement saving. The Council joins the Boston Financial Services Leadership Council and Associated Industries of Massachusetts in efforts to preserve retirement savings tax incentives – which are vital to New England’s financial services industry and the ability of individuals to save for retirement.
“While eliminating tax incentives for individual retirement savings may increase federal revenue in the short term, the long term consequences could be devastating,” said James T. Brett, President & CEO of The New England Council. “Eliminating these incentives would not only result in many Americans not being financially prepared for retirement, but it would also have a significant impact on the financial services industry, which is so critical to New England’s economy.”
As they consider changes to the nation’s tax code, there has been discussion among some leaders in Washington of possibly eliminating tax incentives for individual retirement savings, such as in 401k’s, IRAs and other private retirement plans. In a letter sent to each member of the New England Congressional delegation today, the Council outlined the long-term benefits of encouraging Americans to save for retirement by deferring taxation on retirement savings until the funds are withdrawn years later, and encouraged them to carefully consider the possible consequences of eliminating this incentive. The letter notes that the current tax deferral incentives for savings not only promote individual financial self-sufficiency, but also reduce the burden on our already strained government entitlement systems in the long run.
“National solvency and personal solvency, especially strong retirement savings, go together and reinforce each other. We should never pit one against the other. That’s what proposals to cut back on savings tax deferrals would do. Those hurt most would be low to moderate income workers who enjoy few opportunities to save for retirement outside their workplace plans. It would be a grave policy mistake to try to curb public deficits by cutting back incentives for working Americans to save for their own secure retirements,” said Robert Reynolds, CEO of Putnam Investments, a New England Council member.
“As a wealth of research and recent history demonstrate, it is increasingly important to our country and its citizens that Americans take a more proactive role in creating personal savings and preparing for their own financial futures. Tax-incented savings vehicles are a critical tool for encouraging the necessary retirement saving activity that will help to secure the financial stability of our nation’s retirees now and in the years ahead,” added Mark Casady, Chairman & CEO of LPL Financial, also a New England Council member.
The New England Council, the country’s oldest regional business organization, is an alliance of businesses, academic and health institutions, and public and private organizations throughout New England formed to promote economic growth and a high quality of life in the region. The Council is dedicated to identifying and supporting federal public policies and articulating the voice of its membership regionally and nationally on important issues facing New England. The NEC is also committed to working with public and private sector leaders across the region and in Washington through educational programs and forums for information exchange. For more information, please visit: www.newenglandcouncil.com.