I 

109TH CONGRESS 

2D SESSION H. R. 5322 

To amend the Internal Revenue Code of 1986 to increase the contribution 

limits for individual retirement plans, defined contribution plans, and 

salary reduction plans, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 9, 2006 

Ms. GINNY BROWN-WAITE of Florida introduced the following bill; which was 

referred to the Committee on Ways and Means 

A BILL 

To amend the Internal Revenue Code of 1986 to increase 

the contribution limits for individual retirement plans, 

defined contribution plans, and salary reduction plans, 

and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Retirement Enhance5 ment Act of 2006’’. 

6 SEC. 2. MODIFICATION OF LIMITS ON CONTRIBUTIONS TO 

7 CERTAIN RETIREMENT ACCOUNTS. 

8 (a) INDIVIDUAL RETIREMENT ACCOUNTS.— 


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1 (1) IN GENERAL.—The table in subparagraph 

2 (A) of section 219(b)(5) of the Internal Revenue 

3 Code of 1986 (defining deductible amount) is 

4 amended to read as follows: 

‘‘For taxable years beginning in: 

The deductible 

amount 

is: 

2007 or 2008............................................................... $8,000

2009 or thereafter ........................................................ $10,000.’’. 

5 (2) COST OF LIVING ADJUSTMENT.—Clause (i) 

6 of section 219(b)(5)(C) of such Code is amended— 

7 (A) in the matter preceding subclause (I) 

8 by striking ‘‘after 2008, the $5,000’’ and in9 serting ‘‘after 2009, the $10,000’’, and 

10 (B) in subclause (II) by striking ‘‘calendar 

11 year 2007’’ and inserting ‘‘calendar year 

12 2008’’. 

13 (3) INCREASE IN CATCH-UP CONTRIBUTION

14 AMOUNT.—Subparagraph (B) of section 219(b)(5) 

15 of such Code is amended to read as follows: 

16 ‘‘(B) CATCH-UP CONTRIBUTIONS FOR INDI17 VIDUALS 50 OR OLDER.—In the case of an indi18 vidual who has attained the age of 50 before 

19 the close of the taxable year, the deductible 

20 amount for such taxable year shall be increased 

21 by $2,000.’’. 


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1 (4) INCREASE IN LIMITATION ON DEDUCTION

2 FOR ACTIVE PARTICIPANTS IN CERTAIN PENSION

3 PLANS.— 

4 (A) JOINT RETURNS.—Clause (i) of section 

5 219(g)(3)(B) of such Code is amended to read 

6 as follows: 

7 ‘‘(i) In the case of a taxpayer filing a 

8 joint return for taxable years beginning in 

9 2007 or thereafter, the applicable dollar 

10 amount is $240,000.’’. 

11 (B) RETURNS OTHER THAN JOINT AND

12 MARRIED FILING SEPARATELY.—Clause (ii) of 

13 section 219(g)(3)(B) of such Code is amended 

14 to read as follows: 

15 ‘‘(ii) In the case of any other taxpayer 

16 (other than a married individual filing a 

17 separate return), for taxable years begin18 ning in 2007 or thereafter, the applicable 

19 dollar amount is $150,000.’’. 

20 (C) COST-OF-LIVING ADJUSTMENT.—Para21 graph (3) of section 219(g) of such Code (relat22 ing to adjusted gross income; applicable dollar 

23 amount) is amended by adding at the end the 

24 following new subparagraph: 

25 ‘‘(C) COST-OF-LIVING ADJUSTMENT.— 


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1 ‘‘(i) IN GENERAL.—In the case of any 

2 taxable year beginning in a calendar year 

3 after 2007, the $240,000 amount in clause 

4 (i) and the $150,000 in clause (ii) of sub5 paragraph (B) shall each be increased by 

6 an amount equal to— 

7 ‘‘(I) such dollar amount, multi8 plied by 

9 ‘‘(II) the cost-of-living adjust10 ment determined under section 1(f)(3) 

11 for the calendar year in which the tax12 able year begins, determined by sub13 stituting ‘calendar year 2006’ for ‘cal14 endar year 1992’ in subparagraph (B) 

15 thereof. 

16 ‘‘(ii) ROUNDING RULES.—If any 

17 amount after adjustment under clause (i) 

18 is not a multiple of $500, such amount 

19 shall be rounded to the next lower multiple 

20 of $500.’’. 

21 (b) INCREASE IN ELECTIVE DEFERRALS TO QUALI22 FIED PLANS.— 

23 (1) IN GENERAL.—Subparagraph (A) of section 

24 402(g)(1) of the Internal Revenue Code of 1986 (re25 lating to general rule on limitation on exclusion for 


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1 elective deferrals) is amended by striking ‘‘the appli2 cable dollar amount’’ and inserting ‘‘$30,000’’. 

3 (2) COST-OF-LIVING ADJUSTMENT.—Paragraph 

4 (4) of section 402(g) of such Code (relating to is 

5 amended cost-of-living adjustment) is amended— 

6 (A) by striking ‘‘December 31, 2006’’ and 

7 inserting ‘‘December 31, 2007’’, and 

8 (B) by striking ‘‘$15,000’’ and inserting 

9 ‘‘$30,000’’. 

10 (3) CATCH-UP CONTRIBUTIONS.— 

11 (A) PLANS OTHER THAN SIMPLE AND

12 401(k) PLANS.—Clause (i) of section 

13 414(v)(2)(B) of such Code is amended by strik14 ing ‘‘applicable dollar amount shall be deter15 mined’’ and all that follows and inserting ‘‘ap16 plicable dollar amount shall be $10,000’’. 

17 (B) SIMPLE AND 401(k) PLANS.—Clause 

18 (ii) of section 414(v)(2)(B) of such Code is 

19 amended by striking ‘‘applicable dollar amount 

20 shall be determined’’ and all that follows and 

21 inserting ‘‘applicable dollar amount shall be 

22 $5,000’’. 

23 (C) INFLATION ADJUSTMENT.—Subpara24 graph (C) of section 414(v)(2) of such Code is 

25 amended— 


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1 (i) by striking ‘‘December 31, 2006’’ 

2 and inserting ‘‘December 31, 2007’’, 

3 (ii) by striking ‘‘$5,000’’ and insert4 ing ‘‘$10,000’’, and 

5 (iii) by striking ‘‘$2,500’’ and insert6 ing ‘‘$5,000’’. 

7 (c) INCREASE IN ELECTIVE DEFERRALS TO 457 

8 PLANS.— 

9 (1) IN GENERAL.—Subparagraph (A) of section 

10 457(b)(2) of such Code (defining eligible deferred 

11 compensation plan) is amended to read as follows: 

12 ‘‘(A) $30,000, or’’. 

13 (2) COST-OF-LIVING ADJUSTMENT.—Paragraph 

14 (15) of section 457(e) of such Code (relating to 

15 other definitions and special rules) is amended to 

16 read as follows: 

17 ‘‘(15) COST-OF-LIVING ADJUSTMENT.—In the 

18 case of taxable years beginning after December 31, 

19 2007, the Secretary shall adjust the $30,000 

20 amount under subsection (b)(2)(A) at the same time 

21 and in the same manner as under section 415(d), 

22 except that the base period shall be the calendar 

23 quarter beginning July 1, 2006, and any increase 

24 under this paragraph which is not a multiple of 


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1 $500 shall be rounded to the next lowest multiple of 

2 $500.’’. 

3 (d) DEFINED CONTRIBUTION PLANS.— 

4 (1) DOLLAR LIMIT.—Subparagraph (A) of sec5 tion 415(c)(1) of such Code (relating to limitation 

6 for defined contribution plans) is amended by strik7 ing ‘‘$40,000’’ and inserting ‘‘$80,000’’. 

8 (2) COST-OF-LIVING ADJUSTMENTS.—Sub9 section (d) of section 415 of such Code (relating to 

10 cost-of-living adjustments) is amended— 

11 (A) by striking ‘‘$40,000’’ in paragraph 

12 (1)(C) and inserting ‘‘$80,000’’, and 

13 (B) in paragraph (3)(D)— 

14 (i) by striking ‘‘$40,000’’ in the head15 ing and inserting ‘‘$80,000’’, and 

16 (ii) by striking ‘‘July 1, 2001’’ and in17 serting ‘‘July 1, 2006’’. 

18 (e) SIMPLE RETIREMENT ACCOUNTS.— 

19 (1) IN GENERAL.—Clause (i) of section 

20 408(p)(2)(E) of such Code is amended by striking 

21 ‘‘applicable dollar amount shall be determined’’ and 

22 all that follows and inserting ‘‘applicable dollar 

23 amount shall be $20,000’’. 

24 (2) COST-OF-LIVING ADJUSTMENT.—Clause (ii) 

25 of section 408(p)(2)(E) of such Code is amended— 


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1 (A) by striking ‘‘December 31, 2005’’ and 

2 inserting ‘‘December 31, 2007’’, 

3 (B) by striking ‘‘$10,000’’ and inserting 

4 ‘‘$20,000’’, and 

5 (C) by striking ‘‘July 1, 2004’’ and insert6 ing ‘‘July 1, 2006’’. 

7 (f) EFFECTIVE DATE.—The amendments made by 

8 this section shall apply to years beginning after December 

9 31, 2006. 

10 SEC. 3. ONE-TIME ELECTION TO APPLY HIGHER INCOME 

11 THRESHOLDS UNDER SAVERS CREDIT. 

12 (a) IN GENERAL.—Section 25B of the Internal Rev13 enue Code of 1986 (relating to elective deferrals and IRA 

14 contributions by certain individuals) is amended by redes15 ignating subsections (e), (f), (g), and (h) as subsections 

16 (f), (g), (h), and (i), respectively, and by inserting after 

17 subsection (d) the following new subsection: 

18 ‘‘(e) ONE-TIME ELECTION TO APPLY HIGHER IN19 COME THRESHOLDS.— 

20 ‘‘(1) IN GENERAL.—In the case of an eligible 

21 individual for whom an election is in effect under 

22 this subsection for any taxable year, subsection (b) 

23 shall be applied by substituting for each dollar 

24 amount specified in the table therein an amount 

25 equal to 200 percent of such dollar amount. 


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1 ‘‘(2) ELECTION APPLIES ONLY TO 1 TAXABLE

2 YEAR.—An election to have paragraph (1) apply 

3 with respect to any eligible individual may not be 

4 made for any taxable year if such an election is in 

5 effect with respect to such individual for any other 

6 prior taxable year.’’. 

7 (b) CREDIT MADE PERMANENT.— 

8 (1) REPEAL OF TERMINATION.—Section 25B of 

9 such Code, as amended by subsection (a), is amend10 ed by striking subsection (i). 

11 (2) REPEAL OF EGTRRA SUNSET.—Section 901 

12 of the Economic Growth and Tax Relief Reconcili13 ation Act of 2001 shall not apply to section 618 of 

14 such Act (relating to nonrefundable credit to certain 

15 individuals for elective deferrals and IRA contribu16 tions). 

17 (c) EFFECTIVE DATE.—The amendments made by 

18 this section shall apply to taxable years beginning after 

19 December 31, 2006. 

Æ 


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