Representatives Rob Portman (R-Ohio) and Ben Cardin (D-Md.) reintroduced their Comprehensive Retirement Security and Pension Reform Act (H.R. 10) in the U.S. House of Representatives on March 14, 2001. This bill, which enjoyed broad bipartisan support in the last Congress, passed the House — not once, but twice (401 to 25 on 19 July 2000 and 401 to 20 on 19 September 2000). The pension reform provisions were also included in an omnibus House-Senate tax relief package that was debated (but not enacted) in the closing days of the 106th Congress.

The new Portman-Cardin bill would:

• Increase the current-law $2,000 contribution limit (established in 1981) for deductible and non-deductible IRAs to $5,000 in $1,000 annual increments

• Increase 401(k), 403(b), Section 457 and salary reduction SEP
  contribution limits from $10,500 to $15,000 and SIMPLE contribution limits from $6,000 to $10,000

• Allow older workers to make "catch-up" contributions of up to $5,000 a year to 401(k) type plans and up to $1,500 to IRAs

• Reduce vesting requirements for employer matching contributions to defined contribution (DC) plans from five to three years and improve pension portability by facilitating transfers of earned benefits among and between DC plans and IRAs

• Promote expanded pension coverage by simplifying complex minimum distribution, non-discrimination and top-heavy rules

• Mandate expanded disclosures about plan amendments that will reduce benefit accrual rates in conversions from defined benefit plans to cash balance plans

The bill does not currently address issues related to wear-away of retirement benefits during cash balance pension plan conversions, although it is expected that related provisions will be added in the Senate.

The new Portman-Cardin proposal will probably be moved as a free-standing bill and added later to President George W. Bush’s tax relief package, parts of which have already been passed by the House.  A companion bill is also expected to be introduced shortly in the Senate by Sens. Chuck Grassley (R-Iowa) and Max Baucus (D-Mont.).