A Slew Of Retirement Income Bills

Regarding "paychecks for life," the latest bill accomplishing that goal was introduced last week in the House by Rep. Earl Pomeroy, D-N.D. It would encourage workers to annuitize some of their retirement savings by excluding $5,000 of lifetime annuity payments from taxation each year. The Pomeroy bill excludes 50% of income from a nonqualified annuity, up to $5,000, and excludes 25% of income from a qualified annuity, up to $5,000.

Earlier this month, Sen. Gordon Smith, R-Ore., and Sen. Kent Conrad, D-N.D., introduced comprehensive retirement savings incentive legislation. Their bill includes a provision that provides a monthly tax-advantaged payout. Nonqualified plans would have a 50% exclusion up to $20,000, while qualified annuities would have a 10% exclusion up to $2,100.

Last month, Rep. Nancy Johnson, R-Conn., introduced legislation that excludes 50% of income from a nonqualified annuity, up to $20,000.

The Senate bill also encourages employers to enroll employees automatically in 401(k) plans and offers enhanced retirement asset management for those individuals without access to employer-sponsored plans.

The Smith-Conrad bill also would include an "automatic increase design" feature where employee contribution levels increase automatically each year unless workers opt out; expansion of the Saver's Credit; facilitation of retirement savings through Flexible Spending Accounts; and, a provision enabling tax refunds to go directly to retirement accounts.

Rep. Earl Pomeroy's bill would encourage workers to annuitize some of their retirement savings by excluding $5,000 of lifetime annuity payments from taxation each year