House Passes Bill Expanding IRAs and Employer PensionsWashington, DC, July 20, 2000 - The House of Representatives recently passed H.R. 1102, the "Comprehensive Retirement Security and Pension Reform Act." The bill includes provisions that would: - increase the annual limit on IRA contributions from $2,000 to $5,000 for persons 50 and older beginning in 2001;
- increase the annual limit on IRA contributions for persons under 50 to $3,000 in 2001, to $4,000 in 2002, and to $5,000 thereafter;
- index the IRA limit for inflation (in $500 increments) in 2004 and thereafter;
- increase contribution limits for 401(k), 403(b), and 457 plans in stages to $15,000;
- increase contribution limits for SIMPLE plans in stages to $10,000;
- eliminate the 25 percent of compensation requirements for plans;
- increase pension portability;
- allow additional pension contributions up to $5,000 more than the plan's contribution limit for persons 50 and older;
- narrow the definition of a top-heavy plan;
- reduce regulatory burdens; and
- permit 401(k) and 403(b) plans to allow participants to make after-tax contributions whose eventual distribution would be taxed similar to Roth IRA contributions.
The Senate is expected to consider this legislation after the August recess.
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