When one wants to know what’s happening in the world of employee benefits, Dallas Salisbury, president and CEO of the Washington-based Employee Benefits Research Institute (EBRI), is the go-to resource.
Salisbury sat with AdvisorOne on Thursday at EBRI’s Policy Forum in Washington to discuss some of the top issues facing employee benefits—specifically whether Congress will preserve the current tax incentives for retirement savings in any deficit reduction measures, Social Security and the auto-IRA proposal.
AdvisorOne: Do you see Congress tackling whether to include retirement incentives in any deficit reduction measures this year?
Salisbury: It could well take place this year; if not this year, right after the first of the year. If it’s this year, it could be sometime between Nov. 9 and Jan. 3.
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AdvisorOne: What’s on the table for debate?
Salisbury: The most likely proposals on the table is the proposal included in the [Alice] Rivlin/ [Peter] Domenici bipartisan policy committee proposal as well as the [proposal put forth by the] National Deficit Commission, better known as the Bowles/Simpson Commission. Both of them reduced the limits for defined contribution programs below what they are now; at the same time they provided for the eventual taxation of health insurance benefits and changes in the payroll tax system as it related to employee benefit programs. All of those details would likely be included in a grand bargain [in Congress] in some form.
With the expirations that are due to occur at the end of this year, with all of the Bush tax cuts going away and rates going up, the challenge of sequestration and many other things … by acting right after the first of the year to put things in order [Congress] essentially would be reducing taxes even if those new tax rates were higher than what is now in effect because they would be lower than what will be in effect on January 1 after everything expires.
AdvisorOne: Do you think Congress will tackle reforming Social Security next year?