Rep. Patrick McHenry, a republican of North Carolina serving on the House Financial Services Committee, introduced the Securing Additional Value for Every Retirement Saver (SAVERS) Act in order to temporarily raise contribution limits for defined contribution plans like 401(k), 403(b) and 457 plans, as well as IRAs.
The maximum contribution limitation for the year 2020 would be tripled and, for savers limited by the annual income, the bill permits such savers to contribute up to 100% of their annual compensation from 2019 to 2020; whichever is higher. For instance, the elective deferral limit for 401(k)s in 2020 is $19,500. As such, under the SAVERS Act, a plan participant would be able to contribute, in aggregate, up to the lesser of $58,500 or 100% of their compensation for either 2019 or 2020.
The legislation also follows a possible fifth stimulus bill, after the April24 enactment of the Paycheck Protection Program and Health Care Enhancement Act, which offered an extra $320 billion to restore funding for the Paycheck Protection Program (PPP).
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