WASHINGTON, DC – Americans would be able to save more for retirement and have more control over their savings under the bipartisan Pension Preservation and Savings Expansion Act introduced today by Reps. Rob Portman (R-OH) and Benjamin L. Cardin (D-MD). The Portman-Cardin legislation would provide individuals and families with new savings tools, would further strengthen and expand the employer-sponsored retirement system and would offer important new protections to workers participating in retirement savings plans.

"Americans are having trouble saving enough for retirement, and we've got to do something to help these workers and their families," said Congressman Portman. "This bipartisan approach will give people more options and more tools, not only so they can save more, but also so that their savings can be better protected."

"I am extremely encouraged by the progress we've made since the 2001 pension reform bill in helping Americans take more control of their retirement planning and increasing the number of people who have retirement savings. This bill is the next step in giving Americans the tools they need so they can plan for their future," said Rep. Cardin, a member of the Ways & Means Committee.

The Portman-Cardin Pension Preservation and Savings Expansion Act, HR 1776, would:

Allow Americans to Save More in an IRA or 401(k) . Two years ago, Congress enacted retirement savings provisions sponsored by Representatives Portman and Cardin as part of the 2001 tax relief act. Among other things, this landmark legislation increased the savings limits for IRAs and 401(k)-type plans. The Portman-Cardin legislation introduced today would accelerate those increases so that Americans could save more now.

Beginning next year, the Portman-Cardin Pension Preservation and Savings Expansion Act would allow workers under age 50 to save up to $5,000 in an IRA. Those age 50-and-over would be able to save up to $6,000. Under current law, the limits would be $3,000 for those under 50, and $3,500 for those 50 and older.

This legislation would also allow workers under 50 to save up to $15,000 in their 401(k), and workers age 50-and-older to save up to $20,000 in their 401(k) beginning next year. Under current law, those limits would be $13,000 if under 50, and $16,000 if 50 and older.

Allow Workers to Better Plan for the Future by Making Savings Reforms Permanent. The retirement savings provisions and pension reforms contained in the 2001 tax relief act are scheduled to sunset at the end of 2010. To help workers better plan for their retirement, the Portman-Cardin Pension Preservation and Savings Expansion Act would make these reforms permanent. It will also make permanent the 2001 act's tax credit for low and moderate-income savers while at the same time expanding the amount of the credit and making more middle-income Americans eligible to receive it.

Give Workers Greater Protections Over Their Retirement Plan. In addition to allowing Americans to save more now, the bill would also provide workers with new protections for their 401(k)-type plans and give them better access to retirement planning services. The legislation would empower workers with new rights to diversify company stock that is contributed to their 401(k) account. It would also create a new tax incentive to help employees pay for retirement advice and counseling. Under the legislation, companies would also be required to provide workers with an explanation of accepted investment principles (such as diversification) upon enrollment in their 401(k) plan and quarterly thereafter.

Help Retirees Preserve their Retirement Assets. Under current law, individuals must begin taking money out of their retirement savings accounts at age 70 ½ or face stiff penalties. The Portman-Cardin bill would raise that starting age to 75, which will reflect increases in life expectancy since the 70 ½ rule was first enacted in 1962.

Assist Retirees with Health Care Expenses. The bill contains provisions to help retirees cope with the increasing costs of health care. Under the bill, retirees would be able to use pre-tax income from their retirement savings account to pay for health care premiums. In addition, employers who sponsor 401(k)-type plans would be given a modest new savings vehicle to help fund retiree medical expenses on a pre-tax basis.

The Portman-Cardin legislation is being co-sponsored by Rep. Nancy Johnson (R-CT), Rep. Earl Pomeroy (D-ND), Rep. Roy Blunt (R-MO), Rep. Ellen Tauscher (D-CA), Rep. Elton Gallegly (R-CA), Rep. Albert Wynn (D-MD), Rep. Fred Upton (R-MI), and Rep. Dennis Moore (D-KS).