AFT - American Federation of Teachers

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AFT Resolutions


WHEREAS, saving for retirement has become a significant goal because many educators do not qualify for Social Security, and public employee pension plans need to be supplemented with individual retirement plans to help provide for a dignified retirement; and

WHEREAS, public education employers offer their employees participation in supplemental 403(b) plans; and

WHEREAS, 401(k) plans are the counterpart to 403(b) plans in the private sector; and

WHEREAS, the IRS has made changes to 403(b) regulations that move them closer to 401(k) plans; and

WHEREAS, the IRS rules require that 403(b) participants may take a loan on their accounts of 50 percent of the account balance to a maximum of $50,000; and

WHEREAS, the IRS requires that personal loans must be paid back in five years; but loans for primary residences must be paid back in a reasonable length of time not to exceed 30 years; and

WHEREAS, IRS permits 401(k) participants to transfer account holdings to an IRA, in the event that the plan is no longer offered by their employer; and

WHEREAS, in the current economic environment, education employees need more flexibility to access their 403(b) accounts:

RESOLVED, that American Federation of Teachers work to make changes in the tax code that would increase the loan limit on 403(b) accounts; and

RESOLVED, that AFT work to extend the payback period on 403(b) personal loans; and

RESOLVED, that AFT work to support the transfer of 403(b) accounts to an IRA, in the event that the vendor is no longer offered by their employer.