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Action Alert Update: Urge the Senate, House Ways and Means Committee to Oppose Deferred Compensation Provision Jan. 24, 2007 | Advocacy | NAIFA

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Update: The Senate has voted on this bill and action is no longer needed at this time. Please see the press release here.

Urge the Senate, House Ways and Means Committee to Oppose Deferred Compensation Provision

To: All NAIFA Members
From: John Davidson, LUTCF, FSS, NAIFA President
Date: January 24, 2007
Subject: Updated Action Alert: Urge the Senate, House Ways and Means Committee to Oppose Deferred Compensation Provision

I thank all of the NAIFA members who have contacted their Senators and Representatives asking them to oppose the deferred compensation provision that will be debated shortly in the U.S. Senate. Please note that if your Representative is not on the House Ways and Means Committee, you will only be able to send a message to your two Senators about this issue using the NAIFA Legislative Action Center.

If you have not yet done so, please take action immediately by going to www.capwiz.com/naifa (See below for the updated Action Alert). Please forward this email to your colleagues and request that they also take action on this important issue.

Many of you have asked for more details on the proposal, so we have added the Senate Finance Committee Report on this proposal to the NAIFA website at www.naifa.org/advocacy/documents/senate_report_20070123.pdf

We did receive several reports about problems with the website links in the last Action Alert email and have corrected the issue. Thank you for your patience. In the future, if you have trouble accessing an Action Alert through an email, please go the to the NAIFA website to access the site directly. Action Alerts are always listed in the What's New section at www.naifa.org.

What’s The Issue? Please join with me today in taking action against a very dangerous deferred compensation proposal adopted last week by the U.S. Senate Finance Committee. This proposal is scheduled to be debated today by the full Senate in conjunction with a proposal to raise the federal minimum wage.

What’s At Stake? By capping the favorable tax treatment granted to many workers who participate in non-qualified deferred compensation plans, the proposal would be devastating to the deferred compensation marketplace, deny workers a retirement security option, and deny many companies the ability to attract top talent. (The Senate Finance Committee Report on this proposal is available on the NAIFA website at www.naifa.org/advocacy/documents/senate_report_20070123.pdf.)

I recognize that many NAIFA members do not practice in the deferred compensation market. But many agents do, and many agents participate personally in deferred compensation plans. However, this issue goes well beyond being a threat to the deferred comp market. In an environment where Congress will be trying to find revenue raisers to offset any tax proposal that reduces revenue, such as eliminating the alternative minimum tax, this is a clear signal that our products and marketplaces are potentially in the crosshairs.

If we don’t mount a strong show of force immediately, Congress will consider us an easy target for future tax initiatives. This could well lead to a domino effect with regard to caps on tax-free death benefits and inside build-up, disability income, pension contributions and employer provided health insurance. In short, everything on the life/health side of the business would be at even greater risk than is already the case.

What Can You Do? Here’s all you need to do. Go to NAIFA's Legislative Action Center at www.capwiz.com/naifa and look for the Action Alert box. Select "Urge the Senate to Oppose Deferred Compensation Provision" and follow the instructions to send an email message to your Senators. The system provides a sample message written by NAIFA staff, but It is a well documented fact that individualized messages are more effective than canned ones, so feel free to change the message and subject line.

When you have completed the Senate message, go back to the main page of NAIFA's Legislative Action Center at www.capwiz.com/naifa and select "Urge Congress to Oppose Deferred Compensation Provision." You will be asked for your zip code and, if your Representative is on the House Ways and Means Committee, you can follow the instructions to send another email message. If your Representative is not on the Committee, the system will inform you that you do not need to send a message.

What Are Our Chances? Hill experts are telling us that this effort will be an uphill political battle. We could well lose it. So it is imperative that we illustrate our willingness and ability to sound the alarm and relay our concerns on this matter to Congress.

This is a grave precedent for us and our industry, and we need you to do your part NOW by informing your state’s two Senators and your Representative if he or she is a member of the House Ways and Means Committee that the deferred compensation cut should not be adopted.

Many thanks for all you do for our clients and our industry.

Questions: If you have any questions, please do not hesitate to contact the NAIFA Law and Government Relations Department at (703) 770-8188.

Technical questions? If you have technical questions about using NAIFA's Legislative Action Center, please contact Sara Miga at 703-770-8104, smiga@naifa.org.

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