The life insurance industry will keep a close eye on federal legislation this year, particularly with regard to PAYGO. Nonqualified deferred compensation and the inside buildup of life insurance will be among the many topics discussed in 2008, but Association for Advanced Life Underwriting (AALU) CEO David Stertzer insists that any bill up for consideration "will be viewed through the prism of how it will affect both parties' chances to win the White House in November." Stertzer says the Education Bill delayed by the U.S. Senate Finance Committee could include a provision involving nonqualified deferred compensation as a means of generating revenue. When a revised provision does emerge, it is believed that a $1 million cap will be imposed on deferred compensation plans, with earnings excluded from the cap. Meanwhile, AALU President Larry Raymond expresses concern about exempting only "mirror" non-elective pension plans- which offer the same contribution percentages as qualified retirement plans but for higher levels of compensation -and notes his organization will continue to press for "a full exemption for true non-elective arrangements." With regard to the federal estate tax, Stertzer is certain a vote will occur in 2008, and Raymond underscores the importance of long-term certainty for AALU members' clients. According to Raymond, "We need the right compromise enacted before we reach 2010—and that compromise absolutely needs to include the reunification of the lifetime gift and estate tax credits."
"Tax Issues Will Top the Bill on the Hill Next Year"
Summary:
National Underwriter (Life and Health Financial Services Edition) (12/31/07) P. 8; Postal, Arthur D.
