That was the word from a prominent House Republican in a speech to a Washington, DC meeting of the National Center for Policy Analysis, according to a Business Insurance report.
Representative Sam Johnson, (R-Texas), chairman of the Employer-Employee Relations Subcommittee of the House Education & the Workforce Committee, told the group that the move to make permanent the changes first introduced in the Economic Growth and Tax Relief Reconciliation Act (EGTRRA) would take place in a budget reconciliation measure now being hammered out in the House Ways and Means Committee.
EGTRRA boosted in $1,000 annual increments the maximum annual K plan deferral employees can make. Next year, the maximum deferral will be $15,000, compared with the 2002 maximum of $11,000.
That same law also allows employees age 50 and older to make extra contributions to the plans. This year, older employees can contribute an extra $4,000 to their 401(k) plans, and next year they can kick in an additional $5,000 in catch-up contributions. Without new congressional action, that sweetening of permitted 401(k) contributions will end in 2010 under EGTRRA sunset provisions.
Also possible in bills coming out of the Ways and Means panel, according to Johnson:
- legislation to make it easier for employers to automatically enroll employees – unless they object – in their K plans.
- legislation to make it more tax-advantageous for pension and savings plan participants to take benefits as an annuity paid in monthly installments rather than as a lump sum.