Transportation Intermediaries Association Urges Senate to Fix Stretch IRA Provisions in SECURE Act
For Immediate Release
Proposed legislation could leave some inheritors of IRAs with larger tax burdens, smaller safety net
Alexandria, VA – The Transportation Intermediaries Association (TIA) today called on the U.S. Senate to fix or remove the stretch IRA elimination in the SECURE Act (H.R. 1994), which the House of Representatives passed last spring and the Senate may vote on soon. As currently written, the SECURE Act would leave non-spouse inheritors of IRAs with a larger upfront tax burden and severely limit the amount of tax-deferred growth those IRAs can provide for the inheritors.
“Across the third-party logistics industry, small business owners and employees are planning for their retirement and thinking about the future they will leave for their children and grandchildren,” said TIA President & CEO Robert Voltmann. “Many of the SECURE Act’s provisions have merit, but eliminating the stretch IRA amounts to a significant tax increase on hard-working people who have planned to leave their children with a safety net through an inherited IRA. TIA strongly urges the Senate to amend or remove these provisions before passing the bill.”
TIA has engaged with Senate leadership in advance of a potential vote on the SECURE Act. Earlier this month, TIA sent a letter to Senate Finance Committee Chairman Chuck Grassley (R-Iowa) and Ranking Member Ron Wyden (D-Ore.) urging them to amend or remove the stretch IRA provisions from the SECURE Act so that the hardworking, many family-owned businesses in the 3PL industry can continue to save in their retirement plans without fearing they will leave their children or other beneficiaries with a new and significantly larger tax burden.
A stretch IRA is an estate-planning tool that extends the tax-deferred status of an inherited IRA when it is passed to a non-spouse beneficiary, like a child or grandchild, allowing for continued tax-deferred growth over the inheritor’s lifetime. This provides them with a steady stream of income while also spreading out the tax they must pay on the IRA distributions.
The SECURE Act would limit the stretch period for IRAs to 10 years for the vast majority of non-spousal beneficiaries, requiring the account to be fully distributed—and the inheritor to pay the full tax on those distributions—within that timeframe. This would deprive inheritors of potentially decades’ worth of investment income and would also greatly increase their upfront tax burden.
The Transportation Intermediaries Association (TIA) is the professional organization of the $214 billion third-party logistics industry. TIA is the only organization exclusively representing transportation intermediaries of all disciplines, doing business in domestic and international commerce. TIA is the voice of the 3PL industry to shippers, carriers, government officials and international organizations. TIA is the United States member of the International Federation of Freight Forwarder Associations, FIATA.