[13452]
April 30, 2001
TO: BOARD OF GOVERNORS No. 20-01
FEDERAL LEGISLATION MEMBERS No. 5-01
PRIMARY CONTACTS - MEMBER COMPLEX No. 30-01
PUBLIC INFORMATION COMMITTEE No. 11-01
RE: LEGISLATION TO ENHANCE IRAS AND PENSION PLANS APPROVED BY TWO
HOUSE COMMITTEES
Bipartisan legislation to encourage retirement savings was recently approved by two
House committees. On April 25, the House Ways and Means Committee approved the
“Comprehensive Retirement Security and Pension Reform Act of 2001” (H.R. 10) by a vote of 35
to 6. The House Education and the Workforce Committee approved the ERISA portions of the
bill on April 26 by voice vote. H.R. 10, introduced by Representatives Rob Portman (R-OH) and
Benjamin Cardin (D-MD), is virtually identical to legislation that passed the House
overwhelmingly last July.
The Portman-Cardin bill would, among other things:
• increase the annual limit on IRA contributions in stages from $2,000 to $5,000;
• increase contribution limits for 401(k), 403(b), and 457 plans in stages to $15,000;
• permit persons 50 and older to make “catch-up” contributions to their employer-sponsored
retirement plans; and
• enhance the portability of retirement benefits.
Senator Charles Grassley (R-IA), Chairman of the Senate Finance Committee, and
Senator Max Baucus (D-MT) recently introduced the “Retirement Security and Savings Act of
2001” (S. 742).1 This bill is similar to legislation that was unanimously approved by the Senate
Finance Committee last September. S. 742, unlike the House bill, includes a nonrefundable
income tax credit to subsidize contributions of low- and middle-income persons to IRAs and
employer-sponsored retirement plans and tax credits for small businesses that establish
retirement plans.
1 See Memorandum to Board of Governors No. 19-01, Federal Legislation Members No. 4-01, Primary Contacts –
Member Complex No. 27-01, and Public Information Committee No. 8-01.
2We will inform you of further developments.
Matthew P. Fink
President