VIA FAX
May 29, 1997
TO: PENSION COMMITTEE No. 15-97
RE: FOR COMMENT: PROPOSED "MAKE SAVINGS EASY" ACCOUNTS
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The Institute has been asked to comment on the viability of a new savings vehicle being
considered by Congressional staff. The proposed "Make Savings Easy" Account (MSEA) would
permit individuals to make contributions of up to $1,000 annually to an account established for
a beneficiary. There would be an up-front 10% excise tax on each contribution to the account,
but no other taxes applied to the account. The account, therefore, would be exempt from
income, gift or estate taxes. Although the details of the proposal have yet to be worked out, the
idea may be attractive politically because it enhances savings opportunities and raises revenue
by imposing taxes at the time of contribution to the account.
Please review the attached description of the proposal and let us know your reaction in
terms of likely industry interest, marketability, and any technical issues that may need to be
addressed to make the account viable. Please contact the undersigned at (202) 326-5835 by 1 PM
tomorrow, May 30, 1997. We apologize for the short time frame for review and response.
Russell G. Galer
Assistant Counsel - Pension
Attachment