Wilson Votes to Make Retirement Savings Provisions Permanent

Jun 21, 2002
Press Release
Today, Rep. Joe Wilson, R-SC, voted make the Portman-Cardin Retirement Savings provisions permanent. The Retirement Savings Security Act of 2002, H.R. 4931, allows Americans to save more in their IRA’s and 401(k)-type plans. “It is important that we encourage people to start saving for retirement now,” said Rep. Wilson. “Today’s bill will allow people to plan for the future with more choices and incentives to save. It will also give small businesses relief from regulations that discouraged them from offering pension plans.” Summary of Portman-Cardin provisions contained in the comprehensive tax relief package that was passed last year: · Individual Retirement Accounts (IRAs): The current-law $2,000 IRA contribution limit (established in 1981) for both traditional and Roth IRAs increases to $5,000 by 2008 and indexed for inflation thereafter. · Increased Contributions to 401(k) Plans and Other Pensions: The limit on individual contributions to 401(k)-type plans increases to $15,000 by 2006; and the limit on an employer’s deduction for contributions to certain types of defined contribution plans was raised to 25% of compensation. · Catch-up Contributions: Additional “catch-up” contributions for workers age 50 and above permitted for 401(k)-type plans and IRAs. · Faster Vesting and Pension Portability: The vesting requirements for employer matching contributions is now reduced from 5 to 3 years. Additionally, pensions were made portable so workers could more easily roll over retirement plan assets when they change jobs. · Regulatory Relief to Encourage Small Business Pension Growth: Pension laws were modernized and streamlined to encourage small businesses to offer pension plans. ###