FOR IMMEDIATE RELEASE
Contact: Mark Gundersen (202) 225-8933
May 2, 2001

WASHINGTON - The House of Representatives today passed the Comprehensive Retirement Security and Pension Reform Act of 2001, a bill increasing the benefits of contributions to qualified retirement plans. The bill passed by a vote of 407 to 24 with 187 Democrats joining 219 Republicans and one Independent voting in favor of the plan.

"Many Americans need additional help saving for retirement. This legislation will make it easier for working taxpayers to save for the future and it encourages small businesses to offer retirement plans to their employees," Chairman Thomas said.

The Comprehensive Retirement Security and Pension Reform Act of 2001 provides $52 billion in tax relief to help Americans save for retirement. This bill will make it easier for small businesses to offer retirement plans, address the needs of an increasingly mobile workforce through increased portability, and make pensions more secure and easier for employers to establish. A Joint Committee on Taxation description of this bill can be found at www.house.gov/jct.

Highlights of H.R. 10 include:

• Increased current-law $2,000 IRA contribution limit to $5,000 ($3,000 in 2002, $4,000 in 2003, and $5,000 in 2004), and indexed thereafter.
• Enabled taxpayers that are 50 and older to contribute up to $5,000 a year beginning immediately in 2002. These "catch-up" contributions will enable older taxpayers to more fully prepare for retirement.

• Increased contribution, benefit, and deduction limits in tax-favored retirement plans;
• $5,000 salary reduction "catch-up" contributions to 401(k) plans for workers age 50 and over;
• Faster vesting for employer matching contributions;
• Increased portability of retirement plan assets making it easier for employees to roll over assets when they change jobs;
• Simplified pension system to encourage small businesses to offer pension plans;
• Phased-in increases in the limit on salary reduction contributions to 401(k) plans – reaching $15,000 in 2006, and
• Raising the limit on deductions to certain types of defined contribution plans to 20 percent of compensation.

The bill also contains over 50 other provisions designed to improve retirement security.

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