Bill introduced to temporarily raise DC plan contribution limits

A bill that would temporarily raise contribution limits for defined contribution plans has been introduced in the House in light of the coronavirus pandemic.

Rep. Patrick McHenry, R-N.C., ranking member on the House Financial Services Committee, on April 21 introduced the Securing Additional Value for Every Retirement Saver Act, or SAVERS Act.

The bill would triple maximum contribution limitations for 2020. Participants in 401(k), 403(b), 457 and individual retirement accounts would see contribution limits raised 300% or to 100% of their compensation, whichever is less.

Also, for savers eligible to contribute up to 100% of their annual compensation, they can use their 2019 or 2020 compensation, whichever is higher.

"Every American is feeling the economic impact of COVID-19," Mr. McHenry said in a statement. "We need to give savers the opportunity to shore up the savings they have worked so hard to grow. The SAVERS Act is a commonsense and temporary fix to put these everyday investors back on the right track toward their retirement goal, tax-free. Whether retirement is right around the corner or several years down the road, these funds are critical for the financial well-being of millions of Americans and thousands of struggling businesses through our capital markets."

The bill has been referred to the House Ways and Means Committee.