Legislation (H.R. 10) aimed at helping to expand workers’ retirement savings was the subject of an April 5 hearing by the House Education and the Workforce Subcommittee on Employer-Employee Relations. Subcommittee Chair Sam Johnson (R-TX) opened the hearing saying, “This legislation increases retirement security for millions of Americans by strengthening that ‘third leg’ of retirement security—our pension system.” Rep. Johnson pledged to mark up the bill and move it to the floor in coordination with the House Ways and Means Committee.
Sponsored by Reps. Robert Portman (R-OH) and Benjamin Cardin (D-MD), who appeared before the subcommittee, H.R. 10 emphasizes portability, with several provisions designed to help workers carry over pension savings when they change jobs. In addition, the bill would increase the annual amount that an employer can contribute to an employee’s pension plan.
A similar measure was approved, 401-25, by the House on July 19, 2000 (see The Source, 7/21/00, p. 3). The bill was approved again as part of a debt relief and budget reconciliation package (H.R. 5203) on September 19, 2000; however, the Senate did not consider either measure (see The Source, 9/22/00, p. 4).
H.R. 10 would allow larger annual contributions to Individual Retirement Accounts. The current limit is $2,000. For taxpayers under age 50, the increase would be phased-in, raising the limit to $5,000 by 2003. However, taxpayers age 50 and older would be allowed to make $5,000 contributions starting in 2001. This provision would be particularly beneficial to women since they are more likely to take time out from the workforce to care for family members. Allowing accelerated contributions to pension plans for those nearing retirement would allow women to “catch up” on retirement savings.
Touting the “catch up” provision, Rep. Cardin said, “It’s important for women, many of whom left the workforce to care for a child and then returned to the workforce.” Rep. Robert Andrews (D-NJ) concurred, saying that the provision would “secure their economic future.”
A section of H.R. 10 focuses on helping women to increase their retirement savings. One provision would allow adjustments in pension benefits to accommodate longer life expectancies, while another provision would allow workers to become fully vested in pension plans within three years, rather than the current five years.