WASHINGTON, February 27 — Today, Senators Bernie Sanders (I-Vt.) and Chris Van Hollen (D-Md.) introduced legislation to end tax advantages that allow CEOs to contribute unlimited amounts to special executive retirement plans, which are subject to almost no reporting requirements or oversight from the Department of Labor or Internal Revenue Service.
The CEO and Worker Pension Fairness Act—co-sponsored by Sen. Kirsten Gillibrand (D-NY.)—uses the estimated $15 billion in federal tax revenue recovered from eliminating these tax breaks for executive retirement plans to help secure ordinary workers’ pensions that are at risk in multiemployer plans. The bill also requires the Department of Labor and the IRS to provide much-needed oversight and transparency for executive retirement plans.
“It is outrageous that a corporate executive in America can get unlimited, special tax privileges on hundreds of millions of dollars in savings, while an ordinary worker can only get tax deferment of up to $19,500 on a 401(k),” said Sanders. “We are going to end these tax breaks for CEOs and use that money to protect 1.7 million workers who are worried about a decent retirement as they face instability in their current pension plans.”
“While everyday Americans face limitations on the tax benefits they can receive from investing in their retirement plans, multi-millionaire CEOs of large corporations have a convenient loophole. Providing the super-rich with a government-subsidized retirement account above and beyond a 401(k) is indefensible. Republicans and Democrats alike have called for ending these tax breaks, and it’s past time to get it done. Closing this loophole will help us provide much-deserved certainty to the 1.7 million workers facing deep cuts to the modest pensions they were promised under their multiemployer plans. I’m glad to join Senator Sanders in introducing this common-sense proposal that puts the needs of our working families ahead of millionaires and billionaires,” said Senator Van Hollen.
Their bill introduction comes in response to the findings of a newly released Government Accountability Office (GAO) report that Sanders commissioned,Private Pensions: IRS and DOL Should Strengthen Oversight of Executive Retirement Plans.
GAO reviewed data on the five highest-paid employees at S&P 500 companies and found that 2,300 top executives have more than $13 billion stashed away in these accounts. The average CEO has about $14 million in their account, with some CEOs contributing more than $200 million each. GAO also found little to no oversight on these plans, which are exempt from the Department of Labor’s Employee Retirement Income Security Act (ERISA) reporting requirements. These corporate executive savings plans are only required to submit a one-time, single-page filing statement when created.
“Our bill sends a message to corporate America: We will no longer tolerate a system in which CEOs are showered with endless tax breaks. Today, the wealthiest 400 Americans own $2.9 trillion in wealth—the size of the entire annual economy of the United Kingdom. These 400 billionaires pay a lower rate in taxes than the millions of Americans who have worked their whole lives for a modest pension and are still struggling. We are ending a two-tiered system that gives special tax breaks to billions of dollars in corporate executives’ savings while letting workers’ pensions disappear. It is time to shore up the retirement security of our middle class and working families,” said Sanders.
Read the GAO report here.
Read the CEO and Worker Pension Fairness Act here.
Read a summary of the CEO and Worker Pension Fairness Act here.
