ICI Urges Congress to Extend Favorable Tax Treatment Provided in New Retirement Legislation

Washington, DC, July 1, 2003 - The Institute has urged Congress to extend the favorable tax treatment of annuitized distributions from retirement plans provided in the "Secure Annuity Income for Life Act" (H.R. 2458) to other forms of distribution.

Background
H.R. 2458 was introduced in the House of Representatives by Congressmen Earl Pomeroy (D-ND), Johnny Isakson (R-GA), Phil English (R-PA), and Rob Andrews (D-NJ). The bill would allow taxpayers to exclude from income a portion of their retirement distributions received in the form of an annuity from defined contribution plans, defined benefit plans, or IRAs.

ICI Position
In a letter to the Congressmen, the Institute recommended that Congress provide the same favorable tax treatment to comparable forms of distribution, such as periodic payments distributed over life expectancy or other extended periods.

The Institute stated that it is particularly important that public policy encourage retirees to manage and draw upon their retirement savings in a manner that appropriately addresses their individual needs and circumstances. The Institute noted that individuals might prefer periodic distribution payments for a number of reasons, including cost, flexibility, and risk tolerance.

Related Links
Additional information about the Institute's support for legislation that would ease the tax burden for investors in retirement savings vehicles is available on this website.