Nossaman Partner Douglas Schwartz Quoted In Route 50 On UBIT
Douglas Schwartz was quoted in the Route 50 article GOP Tax Overhaul Could Hit State and Local Pension Plans With Federal Tax. The article describes how state and local government pension plans would be impacted by the Republican tax bill, focusing on how these plans that would become subject to unrelated business income tax (UBIT) staring in 2018. This tax – to which IRAs, 401Ks, and other private retirement plans are already subject – could severely impact public plans’ returns. In the article, Mr. Schwartz commented on the effect the tax proposal (as it stands) would have on prepackaged funds. He said that while pension systems could structure other investments to avoid the UBIT, with prepackaged funds this would not be so. He added They’ll take out debt, or they’ll invest in startups, and the investor has very little control over that…and with the House bill's UBIT provisions, which would go into effect in 2018, there is no ‘grandfathering’."