HR 4931, THE RETIREMENT SAVINGS SECURITY ACT OF 2002, IS CRITICAL TO BABY-BOOMER’S RETIREMENT PLANS

WASHINGTON, DC (June 18, 2002) - The enactment of major pension reform within the Economic Growth and Tax Relief Reconciliation Act of 2001 is a major step forward in helping the baby-boom generation close the savings gap needed to secure a comfortable retirement. Thanks to the tireless efforts of Rob Portman, Ben Cardin, and House leadership, baby boomers taking advantage of higher limits and a new "catch-up" contribution will be able to defer an estimated $23,000 of their salary into an employer sponsored plan by 2010. But in 2011, that amount will drop by one third to $15,500 as EGTRRA expires. Other limits on covered compensation, IRAs, and the maximum employer contribution will face a similar rollback. Baby boomers on the cusp of retirement will be forced to significantly cut back on qualified contributions. Employers will face major costs to adjust their plans and data systems back to the pre-EGTRRA world.

Representatives Portman and Cardin address this harmful disruption to American workers’ savings plans in HR 4931, the Retirement Savings Security Act of 2002. This bill removes the sunset provisions for Title VI of EGTRRA. On behalf of both American workers and employers who sponsor retirement plans for their workers, PSCA urges support of this important legislation.

The Profit Sharing/401(k) Council of America (PSCA), a national non-profit association of 1,200 companies and their 6 million employees, advocates increased retirement security through profit sharing, 401(k) and related defined contribution programs to federal policymakers and makes practical assistance with profit sharing and 401(k) plan design, administration, investment, compliance and communication available to its members. PSCA, established in 1947, is based on the principle that “defined contribution partnership in the workplace fits today’s reality.” PSCA's services are tailored to meet the needs of both large and small companies with members ranging in size from Fortune 100 firms to small, entrepreneurial businesses.