Securities Industry Association Endorses Lifetime Savings Accounts, Retirement Savings Accounts, And Employer Retirement Savings Accounts Proposals - Innovative Savings Plans Would Help Americans Achieve Long-Term Financial Goals

The Securities Industry Association today voiced its strong support for three savings proposals designed to help all Americans fulfill their long-term financial goals -- Lifetime Savings Accounts (LSAs), Retirement Savings Accounts (RSAs), and Employer Retirement Savings Accounts (ERSAs). SIA also praised Senator Craig Thomas (R-WY) and Representative Sam Johnson (R-TX), who announced that they would be introducing legislation to implement the innovative savings plans.

“These plans will simplify, streamline, and strengthen existing savings vehicles,” said Liz Varley, SIA vice president, retirement policy. “LSAs, RSAs, and ERSAs will increase the level of retirement savings, reduce regulatory burdens, and help raise public awareness on how to adequately prepare for retirement. We congratulate Senator Craig and Congressman Johnson for their leadership and foresight on this important initiative.”

First proposed by President George W. Bush in 2003, the three savings proposals would significantly expand and improve the tax-advantage savings programs available to the American people. LSAs and RSAs would allow individuals to make annual contributions of $5,000 (indexed for inflation) each to an LSA and RSA (for a maximum combined contribution of $10,000) without any age or income eligibility requirements. Contributions would not be tax-deductible, but earnings would accumulate and be distributed tax-free. ERSAs would streamline and simplify the existing range of employer-sponsored retirement savings plans. An ERSA, essentially a “new and improved” 401(k), would have an annual employee salary deferral limit of $15,000. The plan would also allow pre-tax deferrals, and includes provisions for a simplified version of the plan for small businesses.