MS Deferred Comp; allow Roth and other after-tax accounts, and comply with qualified domestic relations orders.
Impact
The implications of SB2921 are significant. By enabling after-tax contributions, the bill could help employees save for retirement with added tax benefits. This change aligns the Mississippi Deferred Compensation Plan with similar plans across the country that offer Roth options, potentially making it more attractive for new public employees to join and participate in the state's retirement saving programs. It allows for more advantageous planning, particularly for those who expect to be in a higher tax bracket upon retirement.
Summary
Senate Bill 2921 aims to amend Section 25-14-5 of the Mississippi Code to enhance the Mississippi Deferred Compensation Plan and Trust by allowing the offering of Roth accounts and other after-tax contribution vehicles. This bill would treat any participant's Roth or allowable after-tax contributions as includable in the participant's income at the time the contribution would have been received if deferred. Such a change can provide public employees with more flexible retirement savings options that can grow tax-free if certain conditions are met, which is a feature known to be appreciated by many employees considering retirement planning.
Contention
Discussion surrounding this bill may revolve around its implementation and the necessity of introducing after-tax options in a state-known for its conservative fiscal policies. While supporters may argue that these changes foster greater retirement security and flexibility for employees, opponents might raise concerns about the long-term fiscal implications for state-sponsored retirement plans. Furthermore, considerations of administrative costs and the need for robust employee education on utilizing these options efficiently could also emerge as points of contention among lawmakers.
Income tax; exclude forgiven, cancelled or discharged federal student loan debt under the Public Service Loan Forgiveness Program from the definition of "gross income".