House Ways and Means Committee Clears Pension Bill

During a stormy session the House Ways and Means Committee on July 18, 2003, cleared the Pension Preservation and Savings Expansion Bill of 2003 on a partisan vote. The bill has a ten-year cost of $48 billion and does not include offsets. The bill would accelerate contribution limit increases from the 2001 Tax Act, allow transfers to spouse’s plans and rollovers to non-spouse beneficiaries and Roth IRAs, use corporate bond rates in place of the 30-year Treasury rate to calculate pension accruals, increase the mandatory withdrawal age from 70.5 to 75, and expand the low income saver’s credit. The Democrats’ primary complaint was that they had not been given enough time to even read the lengthy bill before Chairman Thomas tried to ram it through the committee. The House may take up the legislation the week of July 21. Senate timing is not clear, although the lack of offsets is certain to be a problem for the Senate this year.

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