[Congressional Record Volume 149, Number 42 (Monday, March 17, 2003)]
[Senate]
[Pages S3805-S3806]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. WYDEN:
  S. 629. A bill to amend the Internal Revenue Code of 1986 to assist 
individuals who have lost their 401(k) savings to make additional 
retirement savings through individual retirement account contributions, 
and for other purposes; to the Committee on Finance.
  Mr. WYDEN. Mr. President, over a year ago the greed of some senior 
executives at the Enron corporation finally caught up with them. 
Enron's financial house of cards began to tumble, and along with it 
went the pensions and retirement dreams of thousands of employees and 
investors. Among the employees whose pensions were crushed in Enron's 
accounting avalanche were nearly all of Portland General Electric, or 
PGE's 2,700 employees in Oregon.
  Enron took over PGE in June of 1997, and two years later merged the 
PGE employee 401(k) retirement plan into a single plan. That plan 
allowed employees to contribute up to 15 percent of their income, with 
the company matching in Enron stock. When Enron took over PGE in 1997, 
PGE's stock was trading at $27 a share; three years after the merger, 
Enron stock was trading at $85 a share, enticing employees to invest 
100 percent of their 401(k) money in Enron stock.
  Enron's stock had begun to slide in August 2001, and it was not until 
October that real panic set in. At that time the captains of the Enron 
ship knew it was sinking. In an effort to prevent a massive stock sell-
off, senior executives on the deck locked workers in the boiler room, 
preventing them from selling off 401(k) shares while they dumped their 
own. By the time the pension lockdown ended, an Enron share was worth 
less than ten dollars. In early December, Enron filed for bankruptcy.
  Earlier this year Congress enacted significant corporate 
accountability legislation so that executives and accountants can no 
longer use certified financial statements to play a game of financial 
hide-and-seek. But little was done for the workers who were locked in 
the boiler room. The purpose of the legislation I am introducing today, 
the ``Catch-Up Retirement Savings Act,'' is to give those PGE employees 
who were harmed by the greed of Enron executives the opportunity to 
catch-up on some of their lost retirement. My bill does two things to 
help workers. First, it allows employees to triple the deductible 
amount they may otherwise contribute to an IRA, and second, it gives 
employees a 50 percent tax credit on the amount they contribute to 
their IRA. The tax incentives would be available for five years to 
employees whose employer filed for bankruptcy and who was the subject 
of an indictment or conviction resulting from business transactions 
related to such case, and whose employer matched at least 50 percent of 
the employee's contributions to the pension plan.
  No act of Congress can ever respond fully to the egregious harm that 
has been caused to thousands of Oregonians by the collapse of Enron. 
But I believe that something must be done to help recoup some of the 
lost pension savings. The ``Catch-Up Lost Retirement Savings Act'' is a 
small but important step that Congress should take to help employees to 
begin to catch-up on their retirement savings.
  I ask unanimous consent that the text of the bill and a chart be 
printed in the Record.
  There being no objection, the bill and chart were ordered to be 
printed in the Record, as follows:

                                 S. 629

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Catch-Up Lost Retirement 
     Savings Act''.

     SEC. 2. ALLOWANCE OF CATCH-UP PAYMENTS.

       (a) In General.--Section 219(b)(5) of the Internal Revenue 
     Code of 1986 (relating to deductible amount) is amended by 
     redesignating subparagraph (C) as subparagraph (D) and by 
     inserting after subparagraph (A) the following new 
     subparagraph:
       ``(C) Catch-up contributions for certain individuals.--
       ``(i) In general.--In the case of an eligible individual 
     who elects to make a qualified retirement contribution in 
     addition to the deductible amount determined under 
     subparagraph (A)--

       ``(I) the deductible amount for any taxable year shall be 
     increased by an amount equal to 3 times the applicable amount 
     determined under subparagraph (B) for such taxable year, and
       ``(I) subparagraph (B) shall not apply.

       ``(ii) Eligible individual.--For purposes of this 
     subparagraph, the term `eligible individual' means, with 
     respect to any taxable year, any individual who was a 
     qualified participant in a qualified cash or deferred 
     arrangement (as defined in section 401(k)) of an employer 
     described in clause (ii) under which the employer matched at 
     least 50 percent of the employee's contributions to such 
     arrangement with stock of such employer.
       ``(iii) Employer described.--An employer is described in 
     this clause if, in any taxable year preceding the taxable 
     year described in clause (ii)--

       ``(I) such employer (or any controlling corporation of such 
     employer) was a debtor in a case under title 11 of the United 
     States Code, or similar Federal or State law, and
       ``(II) such employer (or any other person) was subject to 
     an indictment or conviction resulting from business 
     transactions related to such case.

       ``(iv) Qualified participant.--For purposes of clause (ii), 
     the term `qualified participant' means any eligible 
     individual who was a participant in the cash or deferred 
     arrangement described in clause (i) at least 6 months before 
     the filing of the case described in clause (iii).
       ``(v) Termination.--This subparagraph shall not apply to 
     taxable years beginning after December 31, 2007.''.
       (b) Credit Allowed for Catch-Up Contributions.--Subpart A 
     of part IV of subchapter A of chapter 1 of the Internal 
     Revenue Code of 1986 (relating to nonrefundable personal 
     credits) is amended by inserting after section 25B the 
     following new section:

     ``SEC. 25C. CERTAIN CATCH-UP IRA CONTRIBUTIONS.

       ``(a) Allowance of Credit.--In the case of an eligible 
     individual who makes an election under section 219(b)(5)(C) 
     for the taxable year, there shall be allowed as a credit 
     against the tax imposed by this chapter for such taxable year 
     an amount equal to 50 percent of so much of the qualified 
     retirement savings contributions of the eligible individual 
     for the taxable year as do not exceed the increase in the 
     deductible amount determined under section 219(b)(5)(C) .
       ``(b) Denial of Double Benefit.--No deduction or other 
     credit shall be allowed with respect to any contribution to 
     which a credit is allowed under subsection (a).
       ``(c) Investment in the Contract.--Notwithstanding any 
     other provision of law, a qualified retirement savings 
     contribution shall not fail to be included in determining the 
     investment in the contract for purposes of section 72 by 
     reason of the credit under this section.
       ``(d) Termination.--This section shall not apply to taxable 
     years beginning after December 31, 2007.''.
       (c) Conforming Amendment.--The table of sections for 
     subpart A of part IV of subchapter A of chapter 1 of the 
     Internal Revenue Code of 1986 is amended by inserting after 
     the item relating to section 25B the following new item:


[[Page S3806]]


``Sec. 25C. Certain catch-up IRA contributions.''.

       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2002.
                                  ____


                  ``Catch-Up'' Savings Amounts Allowed

       For Years 2003-2004: IRA Contribution, $3,000; Catch-up 
     amount, $1,500; and Credit, 50% = $750/year.
       For Years 2005: IRA Contribution, $4,000; Catch-up amount, 
     $1,500; and Credit, 50% = $750/year.
       For Years 2006 and 07: IRA Contribution, $4,000; Catch-up 
     amount, $3,000; and Credit, 50% = $1,500/year.
       Total amount from credit for years 2003 through 2007, 
     assuming maximum amount saved, equals $5,250.
                                 ______