ICMA-RC Calls for Permanency of Savings Plan Reforms

ICMA-RC, a leading provider of retirement plans for state and local employees, is urging retirement plan employers to support passage of legislation that would make permanent key provisions of their defined contribution plans.

In communications to plan sponsors, ICMA-RC is asking employers to contact their local Congressional representatives to urge them to make permanent retirement provisions in the Economic Growth and Tax Relief and Reconciliation Act (EGTRRA) of 2001. EGTRRA includes higher employee contribution limits for employer plans, higher IRA contribution limits, more flexible plan rules, portability, a catch-up for those over 50 (now allows an additional $5,000 contribution for plans and $1,000 for IRAs), and an increase in employer contribution limits.

"Making EGTRRA permanent is core to ICMA-RC's commitment to helping participants build retirement security," said Joan McCallen, president and chief executive officer of ICMA-RC. "As a leader in public sector retirement, we believe it's our responsibility to support permanency for the retirement features in EGTRRA."

Unless the provisions are made permanent, they will expire in 2010. Until then, experts predict that there will be extensive harm done to employer plans in both the public and private sector, as participants grow uncertain about the reliability of the retirement plan features.

For more information about this important issue and guidance on how to contact your representatives, go to our new Legislative Report. A sample email and links to Congressional contact lists have been established to help you communicate with your Congressional representatives.

Ed Ferrigno, vice president of Washington affairs for the Profit Sharing/401(k) Council of America , supported ICMA-RC's efforts to push for passage of the House provisions before the Conference Committee. "It's hard to imagine a higher priority than making the gains we achieved in 2001 permanent," he said. "Failure to do so would be extremely harmful to the employer provided system."