The Washington Report
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November 20, 2017
A Note to Washington Report Subscribers—Holiday Publication Schedule
The Washington Report will not be published on Monday, November 27, 2017. Publication will resume on Monday, December 4, 2017. Happy Thanksgiving!
Legislative
House Approves Tax Reform Bill
On November 16, 2017, the House approved its tax reform bill (H.R. 1—Tax Cuts and Jobs Act) with a 227–205 vote. The Senate is currently working on its own tax reform proposal, and is tentatively scheduled to vote on its bill the week of November 27. If the Senate is able to pass its own bill, both chambers will meet for the reconciliation process. Please see House-Passed Tax Reform Bill Would Change Income Tax Treatment of Some Health and Welfare Benefits in the Aon Publications section.
The full text of H.R. 1 is available here.
Retirement
PBGC Releases Fiscal Year 2017 Annual Report
On November 16, 2017, the Pension Benefit Guaranty Corporation (PBGC) released its Fiscal Year (FY) 2017 Annual Report. The report shows that the deficit in its insurance program for multiemployer plans rose to $65.1 billion at the end of FY 2017, up from $58.8 billion a year earlier. According to the PBGC, the increase was driven primarily by the ongoing financial decline of several large multiemployer plans that are expected to run out of money in the next decade.
PBGC’s single-employer insurance program continued to improve as the deficit dropped to $10.9 billion at the end of FY 2017, compared to $20.6 billion at the end of FY 2016. The primary drivers of the continued improvement include premium and investment income and increases in the interest factors used to measure the value of future liabilities.
The news release is available here.
The PBGC Fiscal Year 2017 Annual Report is available here.
2018 Covered Compensation Tables Released by IRS
On November 13, 2017, the Internal Revenue Service (IRS) released Revenue Ruling 2017-22, which provides the compensation tables for calculating certain benefits under qualified pension, profit-sharing, and stock bonus plans for plan year 2018. For purposes of determining covered compensation for 2018, the taxable wage base is $128,700.
IRS Revenue Ruling 2017-22 is available here.
Aon Publications
House-Passed Tax Reform Bill Would Change Income Tax Treatment of Some Health and Welfare Benefits
On November 16, 2017, by a vote of 227–205, the U.S. House of Representatives passed and sent to the U.S. Senate H.R. 1, the “Tax Cuts and Jobs Act,” the House’s legislative vehicle for income tax reform.
If enacted into law in its current form, H.R. 1 would not change the basic income tax treatment of most employer-provided health benefits under the Internal Revenue Code and the Affordable Care Act. However, H.R. 1 would change the income tax treatment of certain medical expenses and some employer-provided welfare benefit programs.
This bulletin is available here.