WASHINGTON – Today, Congressman Paul Ryan, a member of the House Ways and Means Committee, voted for H.R. 10, the Comprehensive Retirement Security and Pension Reform Act of 2001, a bill to boost retirement security by increasing the Individual Retirement Account (IRA) contribution limit and enacting overall pension reform. Ryan is a cosponsor of this legislation, which passed today in the Ways and Means Committee by a bipartisan vote of 35-6. The bill could come before the full House of Representatives for a vote as early as next week.

"The savings rate in America is far too low. Congress needs to do all it can to remove obstacles that prevent workers from saving more for their retirement," said Ryan. "Wisconsin workers should have the option of putting away more each year in tax-favored retirement plans, and they need pension portability when they change jobs. It's that simple."

"Retirement security for Wisconsin's seniors depends not only on a vigorous and reliable Social Security system, but also on personal savings and employer-sponsored pensions," Ryan said. "The legislation we approved today in committee is a critical step forward that will encourage more personal savings for retirement. It also simplifies our nation's pension laws to encourage more small businesses to offer retirement plans for their employees."

The Comprehensive Retirement Security and Pension Reform Act of 2001 would allow Americans to put more money each year into tax-favored IRAs. It would do so by raising the current-law $2,000 annual contribution limit for IRAs to $5,000 over the next three years ($3,000 in 2002; $4,000 in 2003; and $5,000 in 2004) and indexing it for inflation thereafter. (The present $2,000 limit dates back to 1981 and is not indexed to the rate of inflation.)

Taxpayers age 50 and above would be permitted to contribute $5,000 to an IRA immediately beginning in 2002. These "catch-up" contributions would enable older taxpayers to more fully prepare for retirement.

In addition, the bill contains numerous other provisions designed to improve retirement security, including:

• A gradual increase in the limit on annual contributions to 401(k) plans from the current $10,500 until the limit reaches $15,000 in 2006, and a $500 increase each year thereafter;
• Increased contribution and benefit limits in other employer-provided retirement plans;
• Increased pension portability, making it easier for employees to roll over their retirement savings when they change jobs;
• Simplified pension rules to encourage small businesses to offer pension plans;
• A provision that fixes section 415 in the tax code so building tradesmen can retire with full benefits.

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