In the News

U.S. Rep. Richard Neal called on American business leaders this week to take money they have saved under the Trump administration's recently enacted corporate tax cuts and invest it in employees' retirement plans. 

The Springfield Democrat, in a Tuesday letter to Business Roundtable Chairman Jamie Dimon, argued that while the country's most profitable companies are expected to see a substantial benefit under the GOP tax overhaul, studies suggest many Americans have saved little-to-no money for their retirements. 

Contending that companies face a choice on how they will spend their tax "windfall," Neal encouraged Dimon and other business leaders to invest a portion of their savings into employee pensions or 401(k) plans -- a move which he argued would help mitigate the current "retirement crisis."

"As millions of Americans face dire futures of financial uncertainty, it is my hope that the Business Roundtable will use its leadership and influence to encourage companies to contribute great amounts to their employees' retirements so that more Americans will be prepared for life after work," he wrote to Dimon, whose organization represents CEOs from America's leading companies.

The congressman pointed to Center for Retirement Research at Boston College data, which he said found half of Americans do not have the savings necessary to maintain a high quality of life after retiring or have no retirement savings at all. 

Neal, the top Democrat on the tax-writing House Ways and Means Committee, said he's pleased to see that some companies have already used part of their tax breaks to increase contributions to retirement plans.

Contending that a number of companies suspended such contributions during the economic recession, Neal offered that "this new tax break provides an opportunity for companies to 'make up' those contributions and even increase levels of savings for employees."

The congressman added that while some businesses have offered employees bonuses in response to the tax breaks, he would encourage those companies to "not forget the promises they have made to support their workers into the future."

"Companies should consider using their tax breaks to fund their pension plans and increase employer contributions for their employees' 401(k) plans," he said. 

Under the legislation, the corporate tax rate went down to 21 percent starting in 2018. It, among many other things, also gave pass-through businesses a new 20 percent deduction for the first $315,000 of joint income. 

Aside from urging business leaders invest tax break dollars into retirement plans, the congressman introduced legislation last year, which seeks to ensure teamsters, miners and other American workers' retirement plans are not "put at risk."

Neal, who has been appointed to the Joint Select Committee on the Solvency of Multiemployer Pension Plans, said the proposed bill would "responsibly shore up multi-employer pension plans and guarantee retirees the full benefits they earned."