How the President’s Budget Proposal Would Affect Retirement Savings by Sean Deviney, CFP

Posted on February 27, 2015 by Richard Berkowitz

President Obama’s budget proposal for fiscal 2016 includes several provisions that could improve taxpayers’ access to retirement savings programs and limit the amount some individuals can save in those plans. Following are some of the key measures proposed by the president that await Congressional approval:


Automatically enroll workers. Employees without access to employer-sponsored retirement plans would be enrolled in IRAs automatically through payroll deposit contributions, for which workers may opt out, if they choose.


Automatically enroll service members. The statutory ban on automatic enrollment in retirement plans for armed services members and Department of Defense personnel would be removed.


Improve access for part-time workers.  Employers who provide retirement plans to full-time workers would be required to allow part-time employees who worked a minimum of 500 hours per year for the previous three years or more to make voluntary contributions to the plans.
Cap tax-preferred plans. Tax-preferred retirement savings plans and individual retirement accounts (IRAs) would be capped at $3.4 million per individual. The limits would reset each year based on actuarial tables and other assumptions.


Limit Roth IRA conversions to pre-tax dollars.  Individuals would be prohibited from making after-tax contributions to traditional IRAs and converting them to a Roth IRA and rolling over after-tax contributions from a 401(k) to a Roth IRA.

Change rules governing employer stock in retirement plans.  Repealing the exclusion of net unrealized appreciation in employer securities would prohibit employees from taking in-kind distributions of employers’ stock from a retirement plan and transferring the shares to a taxable brokerage account. When employees sell the shares, the remaining net unrealized appreciation would be taxed at the long-term capital gains rate.

About the Author: Sean Deviney, CFP, is a financial advisor and retirement plan specialist with Provenance Wealth Advisors, an independent financial services firm affiliated with Berkowitz Pollack Brant Advisors and Accountants.  For more information, call (954) 712-8888 or email


Provenance Wealth Advisors, 515 E. Las Olas Blvd., Ft. Lauderdale, Fla. 33301 (954) 712-8888. Securities offered through Raymond James Financial Services, Inc., Members FINRA/SIPC. Opinions expressed are those of Sean Deviney and are not necessarily those of Raymond James. All opinions are as of this date and are subject to change without notice.