Tax Treatment of Employee Contributions to Retirement Plans
The Government Finance Officers Association (GFOA) is aware of a number of bills which have been introduced in the U.S. Congress to allow tax exclusions for contributions to pension plans. Many of these bills have been introduced in order to provide equal treatment for the contributions employees make to various retirement plans including Individual Retirement Accounts (IRAs), Keogh plans, and defined benefit and defined contribution retirement plans. These bills are designed to encourage retirement savings and to give plan participants an added incentive to make contributions.
The GFOA encourages the U.S. Congress to enact tax incentives to stimulate retirement savings through increased contribution limits for retirement systems, deferred compensation arrangements, and other payroll-based savings plans. Such incentives should afford the same rights to members of public retirement plans as to members of private retirement plans.
- Publication date: June 1998