Congressman Lloyd Doggett from Texas—who sits on the House Ways and Means Committee—is introducing a legislative proposal entitled the “Retirement Fairness Act.” More importantly, the proposal would eliminate cross-testing for benefits or contributions. The concern is the obvious one . . . that cross-testing allows older and higher compensated employees to receive allocations that he asserts are discriminatory.
Unfortunately, it does not appear that the Congressman gave consideration to the incentive that many believe that cross-testing gives to the formation of plans and/or to the rank-and-file contributions that are required for cross-tested plans.
ASPPA has already announced that it will vigorously opposed the proposal.
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