The President’s Economic Recovery Advisory Board (PERAB) has approved a new report to President Obama on tax reform options that includes several proposals dealing with retirement security and pensions. Options include consolidating retirement accounts and harmonizing statutory requirements; integrating IRA and 401(k)-type contribution limits and disallowing nondeductible contributions; reducing retirement account leakage; simplifying rules for employers sponsoring plans; and simplifying disbursements.
The PERAB is an outside advisory panel and is not part of the Obama Administration. Their report is meant to provide helpful advice to the Administration as it considers options for tax reform in the future. The report does not represent Administration policy. It is not clear how seriously this report will be taken, but some of its options could turn up in the President’s next budget or as revenue offsets to help fund tax legislation on the Hill.
House Committee Clears Bill to Require Shareholder Approval of Political Spending
On July 29, the House Financial Services Committee approved the “Shareholder Protection Act” (H.R. 4790), which would require companies to hold an annual shareholder vote on how much money to spend on political activities. All Republicans on the panel opposed the bill, as did three Democrats.
The legislation was in response to the Supreme Court’s “Citizens United” ruling in January, which struck down a long-time ban on political spending by corporations and unions.
The bill would also direct the Securities and Exchange Commission to issue rules requiring corporations to disclose any materials for political activities created with or purchased using company funds and would hold officers and directors who authorize political expenditures without shareholder approval liable for three times the amount of dollars spent.
New Report on Local Government Retiree Health Care Funding
A new issue brief from the Center for State and Local Governments finds that the economy has slowed the ability of local governments to address long-term funding of their retiree health care obligations. The new brief finds that many jurisdictions are making sweeping changes in their retiree health care plans:
- 36 percent have increased or plan to increase the years of service required to vest.
- 11 percent have increased the retirement age.
- 39 percent have eliminated or plan to eliminate retiree health benefits for new hires.
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