New Bill Would Help Workers Catch Up on Lost Savings

March 20, 2003 ( - Senator Ron Wyden (D-Oregon) has introduced a new bill that would give workers whose retirement accounts were hit by an employer's malfeasance or bankruptcy an extra chance to make up those savings.

The Catch-Up Lost Retirement Savings Act (S. 629) would allow qualifying employees to triple the deductible amount they may contribute to an Individual Retirement Account (IRA) and receive a 50% tax credit on their IRA contributions for five years.

To qualify, workers would have to have been participating in a plan whose employer offers at least a 50 percent match on pension plan contributions and either files for bankruptcy or was the subject of an indictment or conviction resulting from business transactions related to financial misdeeds.

Wyden said the bill was motivated by the retirement savings losses of Portland General Electric workers after Enron acquired the company – workers who then saw their 401(k) balances plummet in the wake of the beleaguered energy trader’s bankruptcy.