Government workers who want to shave their tax bills and salt away extra money for retirement will be able to set aside up to $2,000 a year beginning in January when they become eligible, for the first time, to participate in Individual Retirement Accounts.
The $750 billion tax cut bill that President Reagan signed into law yesterday will allow millions of Americans who had previously been ineligible to take part in an IRA program -- because their employer has a retirement or pension plan -- to sign up for one in January.
Previously, only persons who worked for companies without any kind of retirement program were allowed to invest in IRAs. Money put in an IRA account is not taxable until the individual retires and begins to draw it out.
Because they have one of the best retirement programs in the nation, the government's 2.8 million federal workers (with a few exceptions) have not been permitted to take advantage of the IRA tax breaks. Under the new law, they will be allowed to set aside up to $2,000 a year (and exclude that amount from their gross income for tax purposes) and defer taxes on it until they retire and their income -- and tax rates -- are lower. Financial institutions will have details within the next couple of weeks.
National Treasury Employees Union wound up its convention in Montreal yesterday. This is probably the first time that a U.S. government union has had its convention in a foreign country, although NTEU does have chapters -- customs inspectors -- in Montreal and Toronto.
NTEU is one of the nation's fastest growing unions, with nearly 70,000 dues-paying members. It represents 120,000 employes of the IRS, Energy Department, Federal Communications Commission and Federal Election Commission.
One of its first orders of business was to condemn the firing of the 12,000 striking air traffic controllers, and about 400 delegates left beautiful Montreal for the day to journey to the U.S. airport at Burlington, Vt. (by bus of course) to picket with members of the Professional Air Traffic Controllers Organization.
The NTEU convention, addressing some of its own concerns, asked its leadership to study the feasibility of setting up a "concerted action plan" which could include strikes, slowdowns or other job actions to protest budget cuts and the "inadequate" 4.8 percent pay raise coming in October.
Marty Levy of the Nuclear Regulatory Commission was elected national vice president for NTEU's Washington region. Officers of the union are returning to Washington today -- by train.