[Congressional Record Volume 142, Number 46 (Friday, March 29, 1996)]
[House]
[Page H3210]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




           CONTRIBUTION LIMIT TO SECTION 457 RETIREMENT PLANS

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from Nebraska [Mr. Bereuter] is recognized for 5 minutes.
  Mr. BEREUTER. Mr. Speaker, this Member rises to invite his colleagues 
to cosponsor legislation which he introduced this morning. The measure, 
similar to provisions in the Balanced Budget Act passed in December, 
raises the annual contribution limit that State and local government 
and nonprofit corporation employees may contribute to their section 457 
retirement plans to equal that which their private-sector colleagues 
may contribute to their 401(k) plans and requires that these plans be 
held in trust.
  Under the Tax Reform Act of 1986, State and local governments and 
nonprofit corporations were prohibited from offering 401(k) plans for 
their employees. Under the 1986 Act, section 457 plans were fixed or 
frozen at an annual contribution limit of $7,500 while the 401(k) limit 
was only $7,000 but was indexed for inflation. This indexing has 
increased the 401(k) limit to $9,240. This measure states that the 
limit for section 457 plans will mirror that of the 401(k).
  Also, by placing the assets in trust the employees retirement funds 
will be protected against claims by general creditors. The financial 
woes of Orange County, CA, are a recent example of why this is prudent. 
Again, Mr. Speaker, this Member invites his colleagues to cosponsor 
this legislation.

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