A recent GAO report says that more than 3 million workers who participate in employer-sponsored defined contribution plans are likely to benefit from the increases in contribution limits allowed under tax law changes in May. The report, requested by Rep. William J. Coyne, D-Pa., found that higher-paid employees and men were likely to benefit the most. However, some low- and moderate-earning workers could benefit indirectly if the new limits spur their employers to form new plans that would extend pension coverage to more employees, expand pension coverage in existing plans or increase contributions for rank-and-file participants.
The report also found that 721,000 older workers, about 11%, also are likely to benefit from a "catch-up” provision that lets those 50 and older contribute up to $5,000 extra to retirement plans. Higher-paid employees are likely to benefit more from this provision than rank-and-file and moderate earners, but women were as likely to benefit as men, the report notes.
The report pinpoints the need for helping workers who don’t have pension coverage, Mr. Coyne said in a statement, adding that he is drafting legislation that would expand pension coverage to those who don’t have any and also improve pensions for low-wage workers and women.
