The False Promise of Portman-Cardin Pension Reform

Abstract

This article analyzes the pension-reform bill introduced in 2019 by Senator Portman and Senator Cardin. Earlier Portman-Cardin bills, enacted in 1996, 2001, and 2006, substantially increased the amounts that higher-income families can save in tax-qualified retirement plans and IRAs, but they included only modest and mostly ineffective measures to encourage retirement savings by lower- and middle-income families. Despite the tens of billions of dollars in tax subsidies spent under the earlier Portman-Cardin legislation, retirement-account values today are too small to provide retirement-income security for most families. Like its predecessors, the new Portman-Cardin bill would increase contribution limits and extend the period of permissible tax deferral. The primary beneficiaries of the new bill will be the most affluent families and the financial-services industry.

Keywords: tax; pensions; retirement savings

JEL Classification: H24