Pension Plan Reform Testimony: NCPA

Strengthening pension plans will require remedial legislation that focuses on long-term impacts, plus a bit of wisdom and courage, said NCPA Senior Fellow Brooks Hamilton in prepared testimony submitted before the House Ways & Means Subcommittee on Select Revenue Measures.

In his testimony, Hamilton suggested five ideas to consider that would strengthen pension plans:

  1. Barring the “highly compensated employees” group from participating in a 401k Plan unless the company also had a modest defined benefit plan.
  2. Providing an annual business tax credit of $100 per pension plan participants for the first hundred participants.

  3. Making a modest defined benefit plan mandatory.

  4. For any company with under 100 employees, doubling the company’s tax deduction for its pension plan contribution. 

  5. Requiring the payment of pension benefits to be made in a life annuity contract.

“Various factors have combined to make the reexamination of direct benefit retirement plans both timely and vital,” said Hamilton. Now is a “beautiful opportunity to strengthen pensions in America.”

Strengthening Private Employer Pension Plans