I
105TH CONGRESS
2D SESSION
H. R. 4123
To provide for pension reform, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
JUNE 24, 1998
Mr. WELLER introduced the following bill; which was referred to the
Committee on Ways and Means
A BILL
To provide for pension reform, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Retirement Savings Assistance Act’’.
(b) AMENDMENT OF 1986 CODE.—Except as other-
wise expressly provided, whenever in this Act an amend-
ment or repeal is expressed in terms of an amendment
to, or repeal of, a section or other provision, the reference
shall be considered to be made to a section or other provi-
sion of the Internal Revenue Code of 1986.
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SEC. 2. ADDITIONAL SALARY REDUCTION CATCH-UP CON-
TRIBUTIONS.
(a) LIMITATION ON EXCLUSION FOR ELECTIVE DE-
FERRALS.—
(1) IN
GENERAL.—Subsection (g) of section
402 is amended by adding at the end the following:
‘‘(10) CATCH-UP
CONTRIBUTIONS
FOR
FOR-
MERLY UNEMPLOYED AND OUT OF THE WORKFORCE
INDIVIDUALS.—In the case of an individual who has
attained age 35 (and not attained age 50) and who
has not been an active participant in a plan under
section 401(a), 403(b) or 457 during the five prior
calendar years, the limitation of paragraph (1) for
such year and subsequent years until attaining the
age of 50, after the application of paragraph (8),
shall be increased by $2,000.
‘‘(11) CATCH-UP CONTRIBUTIONS FOR THOSE
APPROACHING RETIREMENT.—In the case of an indi-
vidual who has attained age 50 during any taxable
year, the limitation of paragraph (1) for such year,
after the application of paragraph (8), shall be in-
creased by $10,000.’’
(2) COST-OF-LIVING ADJUSTMENT.—Paragraph
(5) of section 402(g) (relating to cost-of-living ad-
justment) is amended by inserting ‘‘and the $2,000
amount under paragraph (10) and the $10,000
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amount under paragraph (11)’’ after ‘‘paragraph
(1)’’.
(b) SIMPLE RETIREMENT ACCOUNTS.—
(1) IN
GENERAL.—Paragraph (2) of section
408(p) (relating to qualified salary reduction ar-
rangement) is amended by redesignating subpara-
graph (E) as subparagraph (G) and by inserting
after subparagraph (D) the following new subpara-
graphs:
‘‘(E) CATCH-UP CONTRIBUTIONS FOR FOR-
MERLY UNEMPLOYED AND OUT OF THE WORK-
FORCE INDIVIDUALS.—In the case of an indi-
vidual who has attained age 35 (and not at-
tained age 50) and who has not been an active
participant in a plan under section 401(a),
403(b) or 457 during the five prior calendar
years, the limitation of subparagraph (A)(ii) for
such year and subsequent years until attaining
the age of 50 shall be increased by $2,000.
‘‘(F) 
CATCH-UP
CONTRIBUTIONS
FOR
THOSE
APPROACHING
RETIREMENT.—In the
case of an individual who has attained age 50
during any taxable year the limitation of sub-
paragraph (A)(ii) for such year shall be in-
creased by $10,000.’’
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(2) COST-OF-LIVING
ADJUSTMENT.—Subpara-
graph (G) of section 408(p)(2) (as so redesignated)
is amended by inserting ‘‘and the $2,000 under sub-
paragraph (E) and the $10,000 under subparagraph
(F)’’ after ‘‘subparagraph (A)(ii)’’.
(c) DEFERRED COMPENSATION PLANS
OF STATE
AND LOCAL GOVERNMENTS AND TAX-EXEMPT ORGANI-
ZATIONS.—
(1) IN
GENERAL.—Subsection (b) of section
457 (relating to definition of eligible deferred com-
pensation plan) is amended by adding at the end of
the following new paragraphs:
‘‘(7) CATCH-UP
CONTRIBUTIONS
FOR
FOR-
MERLY UNEMPLOYED AND OUT OF THE WORKFORCE
INDIVIDUALS.—In the case of an individual who has
attained age 35 (and not attained age 50) and who
has not been an active participant in a plan under
section 401(a), 403(b) or 457 during the five prior
calendar years, the limitation of paragraph (2)(A)
for such year and subsequent years until attaining
the age of 50 shall be increased by $2,000.’’
‘‘(8) CATCH-UP
CONTRIBUTIONS
FOR
THOSE
APPROACHING RETIREMENT.—In the case of an indi-
vidual who has attained age 50 during any taxable
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year, the limitation of paragraph (2)(A) for such
year shall be increased by $10,000.’’
(2) COST-OF-LIVING ADJUSTMENT.—Paragraph
(15) of section 457(e) (relating to cost-of-living ad-
justment) is amended by inserting ‘‘, and the $2,000
amount specified in subsection (b)(7) and the
$10,000 amount specified in subsection (b)(8),’’
after ‘‘(c)(1)’’.
(d) CONFORMING AMENDMENTS.—The additional
catch-up contribution amounts made by subsections (a),
(b) and (c) shall be deemed to satisfy IRC sections
401(a)(4), 401(k)(3) and 416, if these sections are other-
wise satisfied.
(e) EFFECTIVE DATE.—The amendments made by
this section shall apply to plan years beginning after De-
cember 31, 1998.
SEC. 3. INCREASE IN OVERALL AND ‘‘AFTER TAX’’ CON-
TRIBUTION LIMIT.
(a) INCREASE IN LIMIT.—
(1) DOLLAR LIMIT.—Subparagraph (A) of sec-
tion 415(c)(1) (relating to limitation for defined con-
tribution plans) is amended by striking ‘‘$30,000’’
and inserting ‘‘$40,000’’.
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(2) 
COST-OF-LIVING
ADJUSTMENTS.—Sub-
section (d) of section 415 (related to cost-of-living
adjustments) is amended—
(A) in paragraph (1)(C) by striking
‘‘$30,000’’ and inserting ‘‘$40,000’’, and
(B) in paragraph (3)(D)—
(i) by striking ‘‘$30,000’’ in the head-
ing and inserting ‘‘$40,000,’’ and
(ii) by striking ‘‘October 1, 1993’’ and
inserting ‘‘December 31, 1998’’.
(b) REPEAL 25 PERCENT LIMIT.—Subparagraph (B)
of section 415(c)(1) of the Internal Revenue Code of 1986
(relating to limitation for defined contribution plans) is
amended to read as follows:
‘‘(B) the participant’s compensation.’’
(c) CONFORMING AMENDMENTS.—
(1) Section 403(b) of the Internal Revenue
Code of 1986 is amended—
(A) by striking ‘‘the exclusion allowance
for such taxable year’’ in paragraph (1) and in-
serting ‘‘the applicable limit under section
415’’, and
(B) by striking paragraph (2).
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(2) Section 404(a)(10)(B) of such Code is
amended by striking ‘‘, the exclusion allowance
under section 403(b)(2),’’.
(3) Section 415(a)(2) of such Code is amended
by striking ‘‘, and the amount of the contribution for
such portion shall reduce the exclusion allowance as
provided in section 403(b)(2)’’.
(4) Section 415(c)(3) of such Code is amended
by adding at the end of the following new subpara-
graph:
‘‘(E) ANNUITY CONTRACTS.—In the case
of an annuity contract described in section
403(b), the term ‘participant’s compensation’
shall mean the participant’s includable com-
pensation as determined under regulations pre-
scribed by the Secretary.’’
(5) Section 415(c) of such Code is amended by
striking paragraph (4).
(6) Section 415(c)(7) of such Code is amended
to read as follows:
‘‘(7) CERTAIN
CONTRIBUTIONS
BY
CHURCH
PLANS NOT TREATED AS EXCEEDING LIMIT.—
‘‘(A) IN GENERAL.—Notwithstanding any
other provision of this subsection, at the elec-
tion of a participant who is an employee of a
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church, a convention or association of churches,
including an organization described in section
414(e)(3)(B)(ii), contributions and other addi-
tions for an annuity contract or retirement in-
come account described in section 403(b) with
respect to such participant, when expressed as
an annual addition to such participant’s ac-
count, shall be treated as not exceeding the lim-
itation of paragraph (1) if such annual addition
is not in excess of $10,000.
‘‘(B) $40,000 AGGREGATE LIMITATION.—
The total amount of additions with respect to
any participant which may be taken into ac-
count for purposes of this subparagraph for all
years may not exceed $40,000.
‘‘(C) ANNUAL ADDITION.—For purposes of
this paragraph, the term ‘annual addition’ has
the meaning given such term by paragraph
(2).’’
(7) Section 415(e)(5) of such Code is amend-
ed—
(A) by striking ‘‘(except in the case of a
participant who has elected under subsection
(c)(4)(D) to have the provisions of subsection
(c)(4)(C) apply)’’, and
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(B) by striking the last sentence.
(8) Section 415(n)(2)(B) of such Code is
amended by striking ‘‘percentage’’.
(d) EFFECTIVE DATE.—The amendments made by
this section shall apply to years beginning after December
31, 1998.
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