Rep. Benjamin L. Cardin, D-Md., introduced the Pension Preservation and Savings Expansion Act, designed to help employees save more for retirement and have more control over their savings, and also would repeal the Roth 401(k) plan. The legislation was introduced Thursday. Mr. Cardin changed his mind about Roth 401(k) plans, scheduled to take effect next year; he now feels they would "add one more plan to a swamped market" and would cost the Treasury "significant amounts of revenue over time," he said in introducing the new legislation.
The act would permanently expand the SAVERS credit for low-income and moderate-income workers and make it refundable. Under current law, the provision — part of the mammoth tax law enacted in 2001 — is scheduled to expire in 2006. The legislation would make all the other pension and retirement provisions in the 2001 law permanent, instead of expiring at the end of 2010.
The bill would also protect employers that automatically enroll all their workers in retirement plans from non-discrimination rules; direct the Labor Department to offer guidance on appropriate default investments for employee contributions; and allow workers to automatically direct tax refunds into their IRAs.
Separately, Rob Portman, co-sponsor of many bipartisan pension and retirement bills with Mr. Cardin, was confirmed by the Senate as the new U.S. trade representative. Mr. Portman, as a Republican congressman representing Ohio, was a member of the House Ways and Means Committee who sponsored numerous pension measures. Voters will choose his successor in a special election later this year.