[13419]
April 17, 2001
TO: PENSION COMMITTEE No. 23-01
PENSION OPERATIONS ADVISORY COMMITTEE No. 32-01
RE: INSTITUTE SUBMITS TESTIMONY ON PENSION REFORM BILL
The Institute has submitted written testimony in support of H.R. 10, the
“Comprehensive Retirement Security and Pension Reform Act of 2001”1 in conjunction with an
April 5 hearing on the bill held by the House Committee on Education and the Workforce’s
Subcommittee on Employer-Employee Relations. In the testimony, which is attached, the
Institute states that it has long supported efforts to enhance retirement savings for Americans,
including efforts that would expand savings opportunities, simplify retirement plan
administration, and enable individuals to better understand and manage their retirement assets.
To achieve these objectives, the Institute states, it is important that Congress: (1) establish
appropriate and effective retirement savings incentives; (2) enact saving proposals that reflect
workforce trends and saving patterns; and (3) reduce unnecessary and cumbersome regulatory
burdens that deter employers — especially small employers — from offering retirement plans.
Because H.R. 10 would achieve these objectives, the Institute urges its enactment this year.
Specifically, the Institute testimony notes the need to increase plan contribution limits,
including the annual IRA contribution limit. The Institute also discusses the proposed catch-up
mechanism that would allow individuals age 50 and over to make additional contributions to
their employer-sponsored retirement plans and IRAs. In this regard, the Institute recommends
that the proposal in H.R. 10 be modified to include a permanent catch-up mechanism for IRA
owners; with respect to a catch-up for retirement plan participants, the Institute recommends
the legislation include an exclusion of catch-up contributions from nondiscrimination testing.
The testimony also addresses the need for the portability provisions included in the bill
and the various provisions that would encourage small employers to establish retirement plans
– including modification of top-heavy rules and an increase in the SIMPLE plan contribution
limits.
1 See Institute Memorandum to Pension Committee No. 18-01 and Pension Operations Advisory Committee No. 27-
01, dated March 23, 2001, for a description of the bill.
2Finally, the Institute urges Congress to consider additional legislation – either as part of
H.R. 10 or as a separate bill — to eliminate barriers to participants seeking to obtain investment
advice with respect to their plan investments.
Russell G. Galer
Senior Counsel
Attachment
Attachment (in .pdf format)