<nobr>May 1, 2007</nobr>

ERIC Submits Letter to The Washington Post on Deferred Compensation

ERIC submitted to The Washington Post the below letter in response to an article discussing the deferred compensation provision being dropped from the minimum wage/small business tax bill:

Lori Montgomery’s April 24th Business section article “Minimum-Wage Accord Produces Protests” may create a misconception that the deferred-compensation limits in the bill would have applied only to executives and very highly paid employees.

The proposal removed from the minimum wage/small business tax agreement would have affected many tens of thousands of hardworking middle managers. It would have applied to plans that provide deferred compensation automatically, and limited contributions and earnings on those deferrals to the lesser of $1 million or the employee’s average annual pay over the preceding five years – a limit that is far less than $1 million for the vast majority of employees.

In short, the proposal would have affected many tens of thousands of workers who participate in their employer’s deferred compensation plan, regardless of whether participation was mandatory or whether the employee had any influence over the amount of deferral. Many of these plans are designed to provide pension benefits that an employer considers appropriate and would have provided through its pension plan if it were not for limits imposed by the tax code. Congress should not limit an employers’ ability to help their employees prepare for retirement.

Mark Ugoretz
President
The ERISA Industry Committee


Websites:

The Washington Post's Article

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