July 17, 2017

The Honorable Orrin Hatch
Chairman, Senate Finance Committee
219 Dirksen Senate Office Building
Washington, DC 20510

The Honorable Ron Wyden
Ranking Member, Senate Finance Committee
219 Dirksen Senate Office Building
Washington, DC 20510

Dear Chairman Hatch and Ranking Member Wyden:

The Coalition to Protect Retirement (CPR)—composed of the leading trade associations representing retirement plan sponsors, administrators, service providers, and related financial institutions—appreciates your leadership as you develop a tax reform proposal in the U.S. Senate. The Coalition would greatly appreciate the opportunity to meet with you, committee staff, and/or members of your informal tax reform working group to provide input and expand upon our suggestions provided in this letter.

We appreciate past efforts in the Senate to preserve current tax incentives for retirement savings and examine potential ways that retirement savings could be enhanced. The Coalition would like to take this opportunity to emphasize that preserving current tax incentives is vital to retirement security for millions of Americans. To the extent that tax reform considers ways retirement savings could be enhanced, we provide ideas on practical, effective options.

About CPR

The Coalition’s mission is to encourage and support retirement savings for American workers through preservation of tax incentives critical to retirement security. The coalition includes: American Benefits Council, American Council of Life Insurers, American Retirement Association, The ERISA Industry Committee, The ESOP Association, Insured Retirement Institute, Investment Company Institute, Securities Industry and Financial Markets Association, and the Society for Human Resource Management.

Preserving Current Tax Incentives for Retirement Savings Is Vital

Current incentives are very successful in fostering retirement security, capital formation, economic growth and limiting pressure on government programs. With 10,000 Americans reaching retirement age every day between now and 2030, the need for tax incentives to encourage and protect retirement savings has never been greater.1 The current tax structure for employersponsored and individual retirement plans and other private-sector savings solutions have resulted in a broad, successful system that provides significant financial security in retirement for Americans at all income levels. This same tax structure simultaneously contributes very substantially to capital formation and economic growth.

As of September 2016, retirement assets totaled $25.0 trillion—accounting for 34 percent of all household assets in the United States, with: $5.3 trillion held in government defined benefit plans; $2.9 trillion held in private-sector defined benefit plans; $7.0 trillion held in defined contribution plans; $7.8 trillion held in IRAs; and $2.0 trillion held relating to annuity reserves.2 This multitrillion dollar pool of capital also helps to finance investments that enhance productivity and encourage business expansion.

In 2013, 81 percent of near-retiree households (working households age 55-64) had accumulated retirement assets, accrued pension benefits, or both.3 Private retirement plans in the United States paid out $5.24 trillion in benefits from 2005 through 2014, playing an essential role in providing retirement income for millions of our nation’s seniors.4 In 2014, there were approximately 685,000 private-sector retirement plans covering 89.9 million participants.5

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1 Insured Retirement Institute Fact Book 2016: A Guide to Information, Trends, and Data in the Retirement Income Industry.

2 Investment Company Institute, The US Retirement Market, Third Quarter 2016.

3 Investment Company Institute analysis of the Survey of Consumer Finances, Statement of the Investment Company Institute, Brian Reid, Chief Economist, Hearing on “Retirement Savings 2.0: Updating Savings Policy for the Modern Economy,” Committee on Finance, United States Senate (September 16, 2014).

4 Employee Benefit Research Institute (EBRI) tabulations of data from the Department of Commerce, Bureau of Economic Analysis, National Income and Product Accounts of the United States and the Department of Labor, Bureau of Labor Statistics, Consumer Price Index.

5 Private Pension Plan Bulletin, Abstract of 2014 Form 5500 Annual Reports, U.S. Department of Labor, Employee Benefits Security Administration (September 2016).