In addition, another provision would require 401 (k) plans to provide an annual snapshot of a retired account holder's income based on its current balance. This provision could help workers to know if they are on track to have enough to retire.
"This could be a very useful disclosure, provided it's done well," said Campbell.
Another proposal in the existing retirement bill abolished the age limit of 70½ for contributions to traditional IRAs
The measure would also change the rules for minimum distribution rules when a 401 (k) or IRA account holder dies.
At the moment, beneficiaries can stretch these RMDs for many years, based on their life expectancy. According to the bill, a balance (or total account balance if there is more than one account) of $ 450,000 must be distributed within five years of the death of the account holder, unless the beneficiary is a spouse or has another qualification.
Apart from possible changes Pension accounts are also expected to include other savings proposals, including tax-deductible universal savings accounts, and changes in the way 529 education plans can be issued, into tax legislation.
It also targets the recent tax cuts for individuals and pass-through companies permanently. These cuts are expected to expire at the end of 2025.
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When a bill is approved by the Committee, it is questionable whether the whole Chamber will vote on it before the midterm elections.
"You do not have much time to decide what will go into every version that gets [considered] by the committee," Campbell said. "Even if it leaves the committee, they probably will not bring it to the table until after the elections."
When changes are made to 401 (k) plans, it would be the first major changes to the Congress since 2006, when the Pension Protection Act was passed
This measure, which is essentially for increasing 401 (k) participation rates included provisions that made it easier for companies to automatically include employees in their pension plan and then automatically increase their pension contribution rate on a yearly basis.