Trump’s Tax Plan and 401(k)s: What’s Old Could Be New Again

Law360

Sharon L. Lippett, a Member of the Firm in the Employee Benefits practice, in the firm’s New York office, authored an article in Law360, titled “Trump's Tax Plan and 401(k)s: What’s Old Could Be New Again.” (Read the full version – subscription required.)

Following is an excerpt:

If the 2017 proposal includes provisions relating to defined contribution retirement plans sponsored by private employers, such as 401(k) plans, the impact will be felt by employers and investment managers, as well as by plan participants. While the Trump administration has stated that the current version of its 2017 tax proposal does not reduce pretax contributions to 401(k) plans, speculation continues that a later draft may include curtailment of these contributions or other changes with a similar impact.

Reduction of benefits under defined contribution plans as a means of raising tax revenues is not a novel idea. The Tax Reform Act of 2014 (the 2014 tax proposal), which was introduced by former Republican Congressman Dave Camp, included various provisions that would have potentially reduced the availability of, or tax benefits under, 401(k) plans and other defined contribution plans. A summary of certain of these provisions follows, along with an analysis of the potential impact on participants, plan sponsors and investment managers.

See also Ms. Lippett's full post on the Financial Services Employment Law blog.