Legislation (H.R. 1102) aimed at helping to expand workers’ retirement savings was approved, 401-25, by the House on July 19.
Sponsored by Reps. Robert Portman (R-OH) and Benjamin Cardin (D-MD), the bipartisan measure was approved last year by the House Education and the Workforce Committee (see The Source, 7/16/99). A slightly revised version (H.R. 4843) was approved last week by the House Ways and Means Committee; that version was then substituted for H.R. 1102 and considered on the floor under the original bill number.
The bill 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.
The bill also would allow larger annual contributions to Individual Retirement Accounts (IRAs). The current limit is $2,000. For taxpayers under age 50, the increase would be phased-in, raising the limit to $3,000 in 2001, $4,000 in 2002, and $5,000 in 2003. However, taxpayers age 50 and older would be allowed to make $5,000 contributions starting in 2001.
Women often have fewer retirement assets than men, because they are more likely to take time out from the workforce to care for family members, and because they often have lower salaries on which to base pensions. In addition, women usually require more retirement funds, as they live longer.
A section of H.R. 1102 focuses on helping women to increase their retirement savings. Some of the provisions in that section would:
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Rep. Portman said, “There has been virtually no growth in pension coverage for the past two decades.” He added: “It is time for Congress to now take steps to reverse this trend.”
The House defeated, 200-221, a Democratic substitute amendment offered by Rep. Charles Rangel (D-NY). The amendment would have created a refundable tax credit of $1,000 annually for low- and middle-income contributors to Retirement Savings Accounts. In addition, the substitute would have created tax credit incentives for small businesses to start and maintain pension plans for their employees.
Rep. Louise Slaughter (D-NY) praised the intent of H.R. 1102 but urged support for the substitute, saying: “While the underlying bill provides significant opportunities for those workers who can most afford to save the maximum amount allowed, few or no opportunities are available for low- and moderate-income workers under the bill.”
Rep. Carolyn Maloney (D-NY) also urged support for the substitute, highlighting the number of low-income retirees among women. “Individuals should have a range of options for their retirement savings. This is especially true and important for women,” she said.
