A coalition of organizations representing employers; the defined contribution retirement plans industry; and the life insurance, mutual fund and securities industries is objecting to efforts by lawmakers to cap the amount of retirement assets that would be protected from creditors during bankruptcy proceedings.
Sens. Charles Grassley, R-Iowa, and Jeff Sessions, R-Ala., are seeking to add a provision to the legislation that would cap at $1 million the amount of retirement assets that consumers could protect from creditors in case of bankruptcy. Their proposal is intended to ensure individuals cannot shield assets from creditors by stuffing their retirement plans. Under their proposal, a persons age would determine the protected amount.
In a letter last week to Senate Judiciary Committee Chairman Orrin Hatch, R-Utah, the coalition noted that placing a cap on retirement assets that could be protected from creditors would in effect be saying that savings up to the level of the cap would be sufficient to achieve a secure retirement.