Tax expenditures

There is something about pensions that makes their sponsors just want to say no. For months we have been reading about cities and states failing to pay what is due into employee pension funds. Now corporate America is getting into the act.

In the last few weeks Mitt Romney’s Individual Retirement Account has come under intense scrutiny because of the amount of money he has stashed away in it.The Wall Street Journal estimates the value of Romney’s IRA to be somewhere between a whopping $20 million and a staggering $101.6 million.

One of the most widely dispensed, and universally accepted, pieces of financial advice is that you should contribute at least enough to your 401(k) to get the full match from your company. If you don’t, so the wisdom goes, you will be giving up free money. Well, it turns out that money isn’t exactly “free.” In a sense, it’s actually coming right out of your paycheck.

Congress will pass no major retirement plan legislation in 2012, but the tax treatment of employment-based retirement benefits almost certainly will be part of any tax code overhaul in 2013—for which ideas and positions will become cemented in 2012— according to practitioners interviewed by BNA.