Business groups join together to query candidates

Mandatory retirement savings plans. Small-business tax credits. Infrastructure investing.

That's just a sampling of issues leading business groups would like the two leading candidates who are vying to be the next president of the United States to address. To get a better feel on where Hillary Clinton and Donald J. Trump stand on these and other topics, Pensions & Investments and 11 organizations recently sent the candidates some questions.

Concerns over “tax reform and deficit reduction impinging on benefit plans” were expressed by a number of groups, said Sam Gilbert, who gathered and will be submitting the questions. Mr. Gilbert is head of The Pension Forum and president of United Plan Administrators, a Westlake Village, Calif.-based consulting firm for small-business retirement plans.

“At a time with significant debt and low savings, any political policy that will limit the amount of savings is certainly not in the national interest,” Mr. Gilbert said.

In addition to P&I and The Pension Forum, participating organizations are: the Plan Sponsor Council of America, American Retirement Association, National Association of Women Business Owners, National Institute of Pension Administrators, National Retail Federation, National Small Business Association, Small Business Council of America, Small Business Legislative Council, Society of Professional Benefit Administrators and the U.S. Chamber of Commerce.

The American Retirement Association, Arlington, Va., for example, asked if the candidates will “preserve, or even enhance the current tax incentives for retirement savings,” and if so, how.

For a small-business owner, “the ability to use tax savings on his or her contributions to generate all or part of the cash flow needed to pay contributions for other employees, and the deferral of income tax on investment earnings, are critical factors in (his or her) decision to adopt and maintain a 401(k) plan,” said the ARA, which focuses on small and midsize employers.

The importance of these incentives for small-business owners is “so poorly understood,” the association has to keep bringing it up often, said Judy Miller, director of retirement policy for the ARA in a separate telephone interview with P&I.

Different groups will publish analyses of tax benefits and argue employers get all the savings. But they overlook that those incentives also are helping employers make contributions to their employees' accounts, Ms. Miller said.

The Plan Sponsor Council of America, based in Chicago, wants to know whether candidates will propose changes to the Internal Revenue Code deferral limits for defined contribution plans.

Longer life spans, additional health-care costs and a challenged Social Security system are putting additional pressure on the defined contribution system, said Steve McCaffrey, chairman of PSCA's board of directors and also chairman of the organization's legal and legislative committee.

Cutting back on the voluntary retirement system by lowering deferral limits would be a “detriment” to employees who “need to retire in comfortable manners,” Mr. McCaffrey said.

State-run retirement programs for private-sector employees is another concern. Since 2012, a number of states, including Maryland, California and Illinois, have passed or are considering legislation to implement such programs.

Acknowledging there is concern among employers that the movement “undermines the pre-emption provision of ERISA and would result in administrative and cost burdens from having to track various retirement proposals in multiple states,” the U.S. Chamber of Commerce would like to know how the next administration will address those issues.

The National Institute of Pension Administrators asked whether candidates would propose and support a mandatory retirement savings plan, in addition to Social Security, for all workers.

A nationwide retirement plan that's mandatory for every employer would be a “big issue” for the group's members — ERISA consultants that help employers set up their retirement plans — said Michelle Marsh, NIPA's president.

Rather than instituting a mandatory retirement plan, the NIPA would like to see the next administration encourage more employers to establish their own plans by re-evaluating some of the legal roadblocks that now exist.

The groups are also seeking the candidates' views on cafeteria plans and self-funding health plans.

One questioner, The Small Business Legislative Council, even proposed ways to simplify the qualified retirement plan system, including eliminating top-heavy rules, simplifying some of the 401(k) discrimination testing and reducing “burdensome and unnecessary reporting to participants and employers.”

The purpose of the questionnaire is to bring these benefits issues to the candidates, who have not given them much attention thus far, Mr. Gilbert said.

Although Barack Obama and Mitt Romney did not respond to the 2012 questionnaire, on most occasions the candidates do respond, Pension Forum's Mr. Gilbert said.

The Pension Forum is again seeking the candidates' views on using pension funds to enhance economic growth and improve critical infrastructure in the U.S.

Most infrastructure investing by U.S. retirement plans is focused on projects overseas, Mr. Gilbert said.

“Our objective is to focus on infrastructure investing in this country,” he said. “We have such a critical need.” n