(Bloomberg News) Putnam Investments LLC Chief Executive Officer Robert L. Reynolds urged lawmakers to reject any plan to cut the U.S. budget that would cap or eliminate tax incentives for workers to save for retirement.
"We absolutely need to take steps to balance the federal budget," Reynolds said yesterday in a speech to the Greater Boston Chamber of Commerce, according to excerpts of a prepared text. "But nothing we do to achieve national solvency should come at the expense of personal solvency."
Congressional Republicans and the Obama administration have been trading proposals for reducing the government's debt, which is approaching the statutory limit of $14.3 trillion. The tax deferral on contributions to 401(k)s and similar retirement savings plans costs the federal government $118 billion annually, according to data from the Tax Policy Center and the Joint Committee on Taxation.
Reynolds said reducing the amount workers can save without paying taxes would hurt low- and middle-income people the most. He said workers earning less than $100,000 annually received 62 percent of all retirement-related tax expenditures.
Putnam managed about $130 billion as of April 30. It also administers retirement assets worth about $20 billion, Jon Goldstein, a spokesman for the Boston-based company, said in an e-mail.