[Congressional Record (Bound Edition), Volume 147 (2001), Part 16]
[Extensions of Remarks]
[Pages 22957-22958]
[From the U.S. Government Publishing Office, www.gpo.gov]



                 ``CATCH-UP'' CONTRIBUTIONS FOR ALL ACT

                                 ______
                                 

                       HON. CONSTANCE A. MORELLA

                              of maryland

                    in the house of representatives

                       Monday, November 19, 2001

  Mrs. MORELLA. Mr. Speaker, I rise today to introduce the ``Catch-Up'' 
Contributions for All

[[Page 22958]]

Act. This bill will amend title 5 to allow all Thrift Savings Plan 
(TSP) participants who are over 50 to take advantage of ``catch-up'' 
contributions.
  Recent changes in tax law (Public Law No. 107-16) permit 401(a) plans 
and others, like the TSP, to accept additional contributions from those 
age 50 and over. Due to the new law, an individual, age 50 or older, 
could put an additional $1,000 next year into a pension plan, in 
addition to regular contributions allowed by law. The following year 
the extra contributions would be $2,000. It would increase each year 
until the extra contribution level was $5,000. Each year thereafter the 
investor could put in an additional $5,000 (on top of the regular 
contribution) in a pension plan.
  However, this new law does not change the terms of any plan to 
provide the benefit; in fact, plans are not required to make the 
benefit available to participants. Instead, plans that choose to do so 
must take steps to amend their plan documents before such contributions 
may be accepted. Similarly, FERSA--the plan document for the TSP--must 
be amended before the TSP may accept additional contributions. Only 
Congress may amend FERSA. Thus, before the TSP can accept catch-up 
contributions in excess of the current limits, Congress must change the 
law. My legislation will make the requisite change in title 5 and allow 
all TSP eligible participants to contribute more to their pension.
  The catch-up provision is particularly justifiable for the Federal 
plan since the TSP was not created by law until 1986. The ``catch-up'' 
contributions will allow workers to make-up for years when they weren't 
employed, didn't contribute to their plan or otherwise weren't able to 
save. It is also particularly beneficial for women who have returned to 
the workforce after taking time away to raise families.
  It is essential that we in Congress do as much as we can to foster 
improved savings by enhancing private and public sector pension plans. 
America has one of the lowest national saving rates among 
industrialized countries. It has fallen steadily over the last 20 
years, seriously jeopardizing Americans' security during what is 
supposed to be their golden years. Even though Americans recognize that 
they should be saving more, half of all family heads in their late 
fifties possess less than $10,000 in net financial assets. With the 
retirement of America's baby boomers approaching, Congress must help 
encourage Americans to save more.
  Mr. Speaker, we have made a positive and necessary first step, we 
must now finish what we started and ensure that TSP participants have 
the same rights as those in the private sector.

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