August 13, 1991
TO: BOARD OF GOVERNORS NO. 58-91
FEDERAL LEGISLATION MEMBERS NO. 16-91
FEDERAL LEGISLATION COMMITTEE NO. 17-91
RE: INSTITUTE TESTIFIES IN SUPPORT OF BENTSEN-ROTH IRA PLAN
__________________________________________________________
On July 31, the Institute testified before the Senate
Finance Committee on S. 612, the "Savings and Investment
Incentive Act of 1991," also known as the Bentsen-Roth IRA bill.
In its testimony, the Institute reaffirmed its enthusiastic
support for the bill, which would increase long-term saving by
allowing individuals to choose between tax deductible
contributions to traditional IRAs or contributions to new "back-
loaded" IRAs from which earnings would not be taxed when they are
withdrawn.
The Institute noted that the Bentsen-Roth plan has the
characteristics needed to be a successful savings program:
universal coverage and simple, easy to understand rules. Once
adopted, a simple, permanent savings program can create a
recurring pattern of saving which encourages Americans to
accumulate increased retirement savings and which is essential to
capital formation and economic growth.
A successful legislative resolution may not be possible
until next session. The issue of "how to pay for" the
restoration of the IRA remains the central challenge.
A copy of the Institute's testimony is attached. Please
call if you wish further information. We will keep you informed
of further developments.
This memo can also be found on FUNDS, the Institute's Fund
User Network and Delivery System, under Legislative Affairs,
Washington Update.
Julie Domenick
Vice President
Legislative Affairs