The bill, HR 10, aims to expand contribution limits for IRAs and 401(k) plans and give more companies an incentive to offer retirement pensions.
The bill, which would cost an estimated $52 billion over 10 years, would gradually increase tax-deferred contribution limits, specifically:
- from $2,000 to $5,000 for traditional and Roth individual retirement accounts by 2004, and
- from $10,500 to $15,000 for 401(k)s by 2006
The bill also makes a provision for people aged 50 and older to play “catch-up’, raising their contribution limits more quickly.
The measure also contains more than 50 provisions aiming to both encourage more companies to offer pensions, and to simplify the system. These include faster employer vesting requirements and greater portability of pension plans for employees who change jobs.