2012 Federal Budget Provisions and Changes to the Business Landscape
|February 18, 2011 4:30 PM
WASHINGTON—The recent release of the 2012 Federal Budget was widely viewed as anticlimactic and it is now being framed as a prelude to critical discussions about politically sensitive topics addressed in the National Commission on Fiscal Responsibility and Reform (NCFRR) report, such as Social Security and Medicare reform.
Here are some provisions in the 2012 Federal Budget:
- The minimum income level subject to state unemployment insurance tax would more than double from $7,000 to $15,000 while the federal unemployment insurance tax would be halved.
- The Pension Benefit Guaranty Corporation (PBGC) would be empowered to adjust its premiums and it would be charged with factoring an individual plan's risk exposure into the calculations. This change would be phased in after two years of study and consultations.
- Occupational pensions with automatic enrollment would be required in all companies. The default would be a direct deposit Individual Retirement Account. The smallest companies would have an exemption.
- To support the introduction of automatic enrollment, the small employer pension plan start-up credit would double to $1,000 for up to three years.
- There would be efforts to curb the mislabeling of workers as independent contractors.
- A work-sharing model for reduced work hours would come with partial unemployment compensation for the lost wages.
- People on disability benefits who are transitioning back into the workforce would not face a precipitous benefit cut-off under the Disability Insurance Work Incentive Simplification Project (WISP).
- Domestic insurers would no longer receive a tax deduction on reinsurance premiums paid to foreign-based affiliates.