A bill that would greatly increase the amount that Americans could save for retirement was introduced in Congress on Wednesday, accompanied by a wave of support from members of the House and business and labor groups.
The bill, a reintroduction of legislation that died at the end of last year's session, listed 255 co-sponsors, including 151 Republicans and 104 Democrats.
A nearly identical measure is expected to be introduced in the Senate within a month, and about 100 groups representing both business and labor have lined up to support it.
"I think we have reached some level of critical mass in terms of momentum for this bill," said James Delaplane, vice president of retirement policy at the American Benefits Council in Washington, D.C. "We are looking at when it will pass, rather than a question of if it will pass."
The bill would gradually boost the amount that employees can contribute to all types of company-sponsored retirement plans. For instance, the current $10,500 annual limit on 401(k) and 403(b) contributions would rise to $15,000 by 2005. Allowable contributions to 457 and Simple plans also would rise.
Maximum Individual Retirement Account contributions would rise to $5,000 from today's $2,000 level.
Americans 50 and older would be able to make richer contributions to all types of retirement plans to "catch up" for the years they were otherwise unable to contribute.
The bill also would create a new type of company retirement plan, which would work much like the popular Roth IRA. Contributions would not be tax deductible, but money paid out at retirement would be tax-free, and it would make it easier to transport pensions from one employer to the next.
The bill, known as the Portman-Cardin Comprehensive Retirement Security and Pension Reform Act, is named after its chief sponsors, U.S. Reps. Benjamin L. Cardin (D-Md.) and Rob Portman (R-Ohio). It now goes to the House Ways and Means Committee.