Retirement Savings Assistance Act - Amends the Internal Revenue Code to: (1) permit specified additional pension contributions for an individual who has attained the age of 35 (but not the age of 50), and who was not a plan participant during the previous five years, until such individual attains the age of 50; and (2) increase the dollar and repeal the 25 percent defined contribution plan limits.
[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4123 Introduced in House (IH)]
105th CONGRESS
2d Session
H. R. 4123
To provide for pension reform, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
June 24, 1998
Mr. Weller introduced the following bill; which was referred to the
Committee on Ways and Means
_______________________________________________________________________
A BILL
To provide for pension reform, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE.
(a) Short Title.--This Act may be cited as the ``Retirement Savings
Assistance Act''.
(b) Amendment of 1986 Code.--Except as otherwise expressly
provided, whenever in this Act an amendment or repeal is expressed in
terms of an amendment to, or repeal of, a section or other provision,
the reference shall be considered to be made to a section or other
provision of the Internal Revenue Code of 1986.
SEC. 2. ADDITIONAL SALARY REDUCTION CATCH-UP CONTRIBUTIONS.
(a) Limitation on Exclusion for Elective Deferrals.--
(1) In general.--Subsection (g) of section 402 is amended
by adding at the end the following:
``(10) Catch-up contributions for formerly unemployed and
out of the workforce individuals.--In the case of an individual
who has attained age 35 (and not attained age 50) and who has
not been an active participant in a plan under section 401(a),
403(b) or 457 during the five prior calendar years, the
limitation of paragraph (1) for such year and subsequent years
until attaining the age of 50, after the application of
paragraph (8), shall be increased by $2,000.
``(11) Catch-up contributions for those approaching
retirement.--In the case of an individual who has attained age
50 during any taxable year, the limitation of paragraph (1) for
such year, after the application of paragraph (8), shall be
increased by $10,000.''
(2) Cost-of-living adjustment.--Paragraph (5) of section
402(g) (relating to cost-of-living adjustment) is amended by
inserting ``and the $2,000 amount under paragraph (10) and the
$10,000 amount under paragraph (11)'' after ``paragraph (1)''.
(b) Simple Retirement Accounts.--
(1) In general.--Paragraph (2) of section 408(p) (relating
to qualified salary reduction arrangement) is amended by
redesignating subparagraph (E) as subparagraph (G) and by
inserting after subparagraph (D) the following new
subparagraphs:
``(E) Catch-up contributions for formerly
unemployed and out of the workforce individuals.--In
the case of an individual who has attained age 35 (and
not attained age 50) and who has not been an active
participant in a plan under section 401(a), 403(b) or
457 during the five prior calendar years, the
limitation of subparagraph (A)(ii) for such year and
subsequent years until attaining the age of 50 shall be
increased by $2,000.
``(F) Catch-up contributions for those approaching
retirement.--In the case of an individual who has
attained age 50 during any taxable year the limitation
of subparagraph (A)(ii) for such year shall be
increased by $10,000.''
(2) Cost-of-living adjustment.--Subparagraph (G) of section
408(p)(2) (as so redesignated) is amended by inserting ``and
the $2,000 under subparagraph (E) and the $10,000 under
subparagraph (F)'' after ``subparagraph (A)(ii)''.
(c) Deferred Compensation Plans of State and Local Governments and
Tax-Exempt Organizations.--
(1) In general.--Subsection (b) of section 457 (relating to
definition of eligible deferred compensation plan) is amended
by adding at the end of the following new paragraphs:
``(7) Catch-up contributions for formerly unemployed and
out of the workforce individuals.--In the case of an individual
who has attained age 35 (and not attained age 50) and who has
not been an active participant in a plan under section 401(a),
403(b) or 457 during the five prior calendar years, the
limitation of paragraph (2)(A) for such year and subsequent
years until attaining the age of 50 shall be increased by
$2,000.''
``(8) Catch-up contributions for those approaching
retirement.--In the case of an individual who has attained age
50 during any taxable year, the limitation of paragraph (2)(A)
for such year shall be increased by $10,000.''
(2) Cost-of-living adjustment.--Paragraph (15) of section
457(e) (relating to cost-of-living adjustment) is amended by
inserting ``, and the $2,000 amount specified in subsection
(b)(7) and the $10,000 amount specified in subsection (b)(8),''
after ``(c)(1)''.
(d) Conforming Amendments.--The additional catch-up contribution
amounts made by subsections (a), (b) and (c) shall be deemed to satisfy
IRC sections 401(a)(4), 401(k)(3) and 416, if these sections are
otherwise satisfied.
(e) Effective Date.--The amendments made by this section shall
apply to plan years beginning after December 31, 1998.
SEC. 3. INCREASE IN OVERALL AND ``AFTER TAX'' CONTRIBUTION LIMIT.
(a) Increase in Limit.--
(1) Dollar limit.--Subparagraph (A) of section 415(c)(1)
(relating to limitation for defined contribution plans) is
amended by striking ``$30,000'' and inserting ``$40,000''.
(2) Cost-of-living adjustments.--Subsection (d) of section
415 (related to cost-of-living adjustments) is amended--
(A) in paragraph (1)(C) by striking ``$30,000'' and
inserting ``$40,000'', and
(B) in paragraph (3)(D)--
(i) by striking ``$30,000'' in the heading
and inserting ``$40,000,'' and
(ii) by striking ``October 1, 1993'' and
inserting ``December 31, 1998''.
(b) Repeal 25 Percent Limit.--Subparagraph (B) of section 415(c)(1)
of the Internal Revenue Code of 1986 (relating to limitation for
defined contribution plans) is amended to read as follows:
``(B) the participant's compensation.''
(c) Conforming Amendments.--
(1) Section 403(b) of the Internal Revenue Code of 1986 is
amended--
(A) by striking ``the exclusion allowance for such
taxable year'' in paragraph (1) and inserting ``the
applicable limit under section 415'', and
(B) by striking paragraph (2).
(2) Section 404(a)(10)(B) of such Code is amended by
striking ``, the exclusion allowance under section
403(b)(2),''.
(3) Section 415(a)(2) of such Code is amended by striking
``, and the amount of the contribution for such portion shall
reduce the exclusion allowance as provided in section
403(b)(2)''.
(4) Section 415(c)(3) of such Code is amended by adding at
the end of the following new subparagraph:
``(E) Annuity contracts.--In the case of an annuity
contract described in section 403(b), the term
`participant's compensation' shall mean the
participant's includable compensation as determined
under regulations prescribed by the Secretary.''
(5) Section 415(c) of such Code is amended by striking
paragraph (4).
(6) Section 415(c)(7) of such Code is amended to read as
follows:
``(7) Certain contributions by church plans not treated as
exceeding limit.--
``(A) In general.--Notwithstanding any other
provision of this subsection, at the election of a
participant who is an employee of a church, a
convention or association of churches, including an
organization described in section 414(e)(3)(B)(ii),
contributions and other additions for an annuity
contract or retirement income account described in
section 403(b) with respect to such participant, when
expressed as an annual addition to such participant's
account, shall be treated as not exceeding the
limitation of paragraph (1) if such annual addition is
not in excess of $10,000.
``(B) $40,000 aggregate limitation.--The total
amount of additions with respect to any participant
which may be taken into account for purposes of this
subparagraph for all years may not exceed $40,000.
``(C) Annual addition.--For purposes of this
paragraph, the term `annual addition' has the meaning
given such term by paragraph (2).''
(7) Section 415(e)(5) of such Code is amended--
(A) by striking ``(except in the case of a
participant who has elected under subsection (c)(4)(D)
to have the provisions of subsection (c)(4)(C)
apply)'', and
(B) by striking the last sentence.
(8) Section 415(n)(2)(B) of such Code is amended by
striking ``percentage''.
(d) Effective Date.--The amendments made by this section shall
apply to years beginning after December 31, 1998.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Ways and Means.
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