Assemblyman pushes for uniformity

Paul Clinton

NEWPORT-MESA -- Local financial planners and tax advisors are saluting

a local assemblyman’s effort to help workers sock away more money for

retirement.

Lorian Petry, at Newport Beach-based Financial Planning Partners,

called Assemblyman John Campbell’s plan to raise contribution limits and

reduce rollover penalties a “no-brainer.”

Campbell, who represents Newport Beach, said he would introduce a

bill, perhaps as early as next week, that would help the state match

federal law. Not since 1997 has the state’s Franchise Tax Board seen eye

to eye with federal law on personal retirement accounts.

Chiefly, Campbell’s bill would raise the annual limit in individual

retirement accounts from $2,000 to $3,000 per year. It would put the

state on the same page with President Bush’s sweeping tax package passed

by Congress in June.

The bill would also allow more freedom to roll over various retirement

plans, including a 401K, 403B -- held by religious, charitable and

educational workers -- and 457 -- held by many local and state government

employees -- into an IRA during a change of jobs.

All plans allow workers to invest tax-free dollars toward retirement.

The money can then, at least in the case of a 401K and IRA, be withdrawn

at age 59 1/2.

“I cannot imagine the state voting against the new federal guidelines

that will be going into effect over the next few years,” Petry said.

“Individuals may soon be asked to self-fund their entire retirement

through their 401Ks, 403Bs, IRAs and personal savings. Do lawmakers in

Sacramento believe Social Security is truly that secure?”

Predictions have placed the drying up of the Social Security till at

anywhere between 2013 and 2040, Petry said.

Now more than ever, Petry said, it is important for individuals to

seize the responsibility for their own retirements.

Campbell, a certified public accountant, said he hoped the bill would

give working people more freedom to do just that.

“These are always to improve the way for people to have a good

retirement,” Campbell said. “I think this is a priority. To oppose this

is shortsighted.”

However, Campbell will no doubt have difficulty in pitching the idea

to a Democratic legislature reeling from a sagging economy and fallout

from the failed attempt to deregulate the power business.

Campbell’s bill could result in as much as $100 million in lost

revenue for state programs.

“It’s going to be a tough sell,” said Sandy Harrison, the assistant

director of the Dept. of Finance. “Because of the climate we’re in,

anything like this is going to be that much tougher to get passed.”

Todd Giles, a tax consultant at the Costa Mesa branch of Deloitte &

Touche, agreed that federal and state retirement law should be uniform.

“It should be the same,” Giles said. “It’s much easier that way.”

* Paul Clinton covers the environment and John Wayne Airport. He may

be reached at (949) 764-4330 or by e-mail ato7

[email protected] .