The life insurance industry last week edged closer to its goal of having tax provisions that would have limited non-qualified deferred compensation packages stripped from pending legislation.
The provision was included in the Senate version of legislation raising the minimum wage that had been tucked into another piece of legislation providing supplemental appropriations for the wars in Iraq and Afghanistan.
But it was stripped from the bill on April 23 by conferees seeking to reconcile different bills passed by the House and the Senate.
The new bill, H.R. 1591, the U.S. Troops Readiness, Veterans’ Health, and Iraq Accountability Act of 2007, was scheduled to be voted on by the House and Senate late last week.
However, congressional staffers, industry lobbyists and members of Congress cautioned that the tax provisions dealing with non-qualified deferred compensation plans could potentially be reinserted in follow-up legislation.
That’s because President Bush has vowed to veto the current version of the bill, which contains a timetable for withdrawal from Iraq he opposes.
That could open up, sources said, any number of possibilities for the provisions to be reinserted because senators on both sides of the aisle support a greater tax package in legislation raising the minimum wage than do tax-writers in the House, and no one is certain how the issue will ultimately be resolved.
The National Association of Insurance and Financial Advisors lauded the decision of conferees to remove the provision on April 23, clearing the way for floor action in both houses of Congress.
But Michael, Kerley, senior vice president, federal government relations, for NAIFA, cautioned, “We know there is a continuing interest in Congress in developing sound public policy relating to deferred compensation, so this is not likely the end of the story.
“But, for now it’s the best outcome possible,” he said.