Rumors notwithstanding, the House Ways & Means Committee tells the American Retirement Association, the committee has no plans to revisit Rothification as part of the new tax reform discussions.
In response to an earlier post on sister publication NAPA Net regarding the potential for Rothification — limiting the amount of 401(k) contributions that could be made on a pre-tax basis — a spokesman for the Ways & Committee responded: “Chairman Brady continues to advocate for making our tax code more family-friendly including helping future generations save for retirement. The Ways & Means Committee has no plans to revisit the issue of so-called ‘Rothification’ as part of any 2.0 proposals and any rumors to the contrary are simply not correct.”
The post outlined a number of potential impacts on retirement plans and retirement plan incentives as part of a possible “Tax Reform 2.0,” including Rothification, which had been a topic of much concern during the buildup to the Tax Cuts and Jobs Act (TCJA).
Brian Graff, CEO of the American Retirement Association, said, “We very much appreciate Chairman Brady responding to our concerns so promptly and we look forward to working with him on proposals that will strengthen our nation’s retirement system.”
House Ways & Means Committee Chairman Kevin Brady (R-TX) at a June 26 Washington Post event entitled “Tax Reform in America: The Six-Month Report,” said that after the July 4 recess he would be releasing additional tax cut proposals that include retirement savings provisions. Brady said that he expects a legislative outline to be released in early August, and votes on the proposals to be held in the fall depending on the schedule the leadership sets.
Brady said he envisioned a package of two, three or four approaches. They would include provisions would make the Tax Cut and Jobs Act (TCJA) permanent and revisit areas of retirement savings that tax reform did not address.
“We think the time is right to help families save more and earlier in their life, whether it’s for health care or school or for their kids or retirement in the long term — [we’re] thinking through some ideas there,” Brady said.