The Small Business Pension Promotion Act
 

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January 2012

Dear %%f_name%%,

In December of 2011, Representatives Ron Kind (D-WI), Jim Gerlach (R-PA), and Richard Neal (D-MA) introduced The Small Business Pension Promotion Act (H.R. 3561). The intent of the proposed legislation is to reduce administrative burden and encourage employers to sponsor a retirement plan. Here is a summary of provisions included in the proposed legislation that may be of interest.

Required Minimum Distributions

Currently, certain individuals are required to take a minimum distribution at age 70½. Due to market fluctuations, some individuals in a defined contribution (DC) plan or Individual Retirement Account (IRA) do not want to take a distribution that would realize a loss in market value. The proposed legislation would allow the minimum required distribution in a DC plan or IRA to be decreased by the loss in the account value as a result of a downturn in the market.

Self-Employment Contribution Act Deduction

The Self-Employment Contribution Act (SECA) tax is applied to small business owners to cover their contributions to Social Security and Medicare. The proposed legislation would allow small business owners to use a SECA deduction for contributions to a qualified plan or IRA.

 

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