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CONFORMITY ESTIMATES FOR EDUCATION, IRA, AND PENSION ISSUES (12/10/01 )
Enactment assumed after June 30, 2002
ACT AFFECTED
SECTION PROVISION EFFECTIVE FOOTNOTES TAX
2002-03 2003-04 2004-05
Education Provisions
401
Education IRAs - increase annual contribution amount to $2,000 tyba 12/31/01 b/ c/ PIT baseline loss
402 Qualified tuition plans - tax free distributions tyba 12/31/01 b/ PIT negl. loss -$0.5 -$1
Individual Retirement Arrangement Provisions
601 Modifying IRA Contribution Limits - increase the maximum
contribution limit for traditional and Roth IRAs to: $3,000 in 2002
through 2004, $4,000 in 2005 through 2007, and $5,000 in 2008;
index in years thereafter tyba 12/31/01 b/ c/ PIT -$8 -$8 -$12
601 IRA Catch-up Contributions - increase maximum contribution
limits for traditional and Roth IRAs for individuals age 50 or older
by $500 in 2002 and $1,000 in 2006 tyba 12/31/01 b/ c/ PIT -$1 -$1 -$1
602 Deemed IRAs under employee plans pyba 12/31/02 PIT --- negl. effect negl. effect
Provisions for Expanding Coverage
611 Increase limitation on exclusion for elective deferrals to: $11,000
in 2002, $12,000 in 2003, $13,000 in 2004, $14,000 in 2005, and
$15,000 in 2006; index thereafter yba 12/31/01 a/ b/ c/ PIT -$2 -$10 -$16
611 Increase limitation on SIMPLE elective contributions to: $7,000 in
2002, $8,000 in 2003, $9,000 in 2004, and $10,000 in 2005; index
thereafter yba 12/31/01 b/ PIT -$1 -$1 -$2
611 Increase defined benefit dollar limit to $160,000 yba 12/31/01 a/ b/ PIT baseline loss
611 Lower early retirement age to 62; lower normal retirement age to
65 yba 12/31/01 a/ b/ PIT negl. effect negl. effect negl. effect
611 Increase annual addition limitation for defined contribution plans
to $40,000 with indexing in $1,000 increments yba 12/31/01 a/ b/ -$1 -$1 -$1
PIT
Page 1 of 5
CONFORMITY ESTIMATES FOR EDUCATION, IRA, AND PENSION ISSUES (12/10/01 )
Enactment assumed after June 30, 2002
ACT AFFECTED
SECTION PROVISION EFFECTIVE FOOTNOTES TAX
2002-03 2003-04 2004-05
611
Increase qualified plan compensation limit to $200,000 with
indexing in $5,000 increments and expand availability of qualified
plans to self-employed individuals who are exempt from the self- yba 12/31/01and
employment tax by reason of their religious beliefs tyba 12/31/01 a/ b/ PIT -$5 -$4 -$5
611
Increase limits on deferrals under deferred compensation plans of
State and local governments and tax-exempt organizations to:
$11,000 in 2002, $12,000 in 2003, $13,000 in 2004, $14,000 in
2005, and $15,000 in 2006; index thereafter yba 12/31/01 b/ c/ PIT -$3 -$3 -$3
612 Plan loans for S corporation owners, partners, and sole
proprietors yba 12/31/01 Both n/a n/a n/a
613 Modify top-heavy rules yba 12/31/01 a/ b/ Both minor loss minor loss minor loss
614 Elective deferrals not taken into account for purposes of
deduction limits yba 12/31/01 a/ b/ c/ Both -$4 -$3 -$3
615 Repeal of coordination requirements for deferred compensation
plans of State and local governments and tax-exempt
organizations yba 12/31/01 b/ PIT -$1 -$1 -$1
616
Definition of compensation for puropses of deduction limit yba 12/31/01 a/ Corp negl. loss negl. loss negl. loss
616 Increase stock bonus and profit sharing plan deduction limit from
15% to 25% tyba 12/31/01 a/ b/ Both -$1 -$1 -$1
617
Option to treat elective deferrals as after-tax Roth contributions yba 12/31/05 --- --- ---
618 Nonrefundable credit to certain individuals for elective deferrals
and IRA contributions (sunset 12/31/06) tyba 12/31/01 n/a n/a n/a
619 Small business (100 or fewer employees) tax credit for new qualified plans
retirement plan expenses - first 3 years of the plan established after n/a n/a n/a
12/31/01
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CONFORMITY ESTIMATES FOR EDUCATION, IRA, AND PENSION ISSUES (12/10/01 )
Enactment assumed after June 30, 2002
ACT AFFECTED
SECTION PROVISION EFFECTIVE FOOTNOTES TAX
2002-03 2003-04 2004-05
620 Eliminate user fee for certain requests regarding small employer
pension plans with at least one non-highly compensated
employee rma 12/31/01 n/a n/a n/a
621 Treatment of nonresident aliens engaged in international
transportation services tyba 12/31/01 n/a n/a n/a
Provisions for Enhancing Fairness for Women
631
Additional catch-up contributions for individuals age 50 or older -
increase the otherwise applicable contribution limit for all plans
other than SIMPLE by $1,000 in 2002, $2,000 in 2003, $3,000 in
2004, $4,000 in 2005, and $5,000 in 2006; SIMPLE plan catch-
ups would be 50% of that applicable to other plans;
(nondiscrimination rules would not apply) tyba 12/31/01 a/ b/ c/ PIT -$10 -$7 -$5
632 Equitable treatment for contributions of employees to defined
contribution plans yba 12/31/01 a/ b/ c/ PIT -$4 -$3 -$3
633 Faster vesting of certain employer matching contributions cf pyba 12/31/01 a/ b/ PIT negl. loss negl. loss negl. loss
634 Simplify and update the minimum distribution rules by modifying
post-death distribution rules yba 12/31/01 PIT negl. baseline loss
635 Clarify tax treatment of division of section 457 plan benefits upon
divorce tdapma 12/31/01 PIT negl. effect
636 Modify safe harbor relief for hardship withdrawals from 401(k)
plans yba 12/31/01 a/ PIT negl. effect
637 Waiver of tax on nondeductible contributions for domestic or
similar workers tyba 12/31/01 n/a n/a n/a
Provisions for Increasing Portability for Participants
641 Rollovers allowed among governmental section 457 plans, negligible negligible
section 403(b) plans, and qualified plans da 12/31/01 a/ b/ PIT minor loss loss loss
642 Rollovers of IRAs to workplace retirement plans da 12/31/01 a/ b/ PIT negl. effect
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CONFORMITY ESTIMATES FOR EDUCATION, IRA, AND PENSION ISSUES (12/10/01 )
Enactment assumed after June 30, 2002
ACT AFFECTED
SECTION PROVISION EFFECTIVE FOOTNOTES TAX
2002-03 2003-04 2004-05
643 Rollovers of after-tax retirement plan contributions dma 12/31/01 a/ b/ PIT negl. effect
644 Waiver of 60-day rule da 12/31/01 PIT negl. effect
645 Treatment of forms of qualified plan distributions yba 12/31/01 a/ b/ PIT negl. effect
646 Rationalization of restrictions on distributions da 12/31/01 a/ PIT negl. effect
647
Purchase of service credit in governmental defined benefit plans ta 12/31/01 a/ b/ PIT negl. effect
648 Employers may disregard rollovers for cash-out amounts da 12/31/01 a/ b/ PIT negl. effect
649 Minimum distribution and inclusion requirements for section 457
plans da 12/31/01 b/ considered in other provisions
Provisions for Strengthening Pension Security and Enforcement
651/652 Phase-in repeal of 160% of current liability funding limit; extend
maximum deduction rule pyba 12/31/01 a/ b/ Corp -$1 -$1 -$1
653 Excise tax relief for sound pension funding yba 12/31/01 Corp n/a n/a n/a
654 Repeal 100% of compensation limit for multi-employer plans yba 12/31/01 a/ b/ Corp negl. loss negl. loss negl. loss
654 Modify section 415 aggregation rules for multi-employer plans tyba 12/31/01 a/ b/ Corp negl. loss negl. loss negl. loss
655 Investment of employee contributions in 401(k) plans aiii TRA '97 n/a n/a n/a
656 Prohibited allocations of stock in an ESOP S corporation plan years after negligible negligible minor gain
12/31/01 a/ Corp gain gain
negligible
657 Automatic rollovers of certain mandatory distributions dma frap a/ Corp --- loss -$1
658 Clarify treatment of contributions to multi-employer plans yea DOE Corp baseline loss
659 Notice of significant reduction in plan benefit accruals pateo/a DOE n/a n/a n/a
Provisions for Reducing Regulatory Burdens
661 Modify timing of plan valuations pyba 12/31/01 a/ baseline loss
662 ESOP dividends may be reinvested without loss of dividend
deduction tyba 12/31/01 a/ Corp -$2 -$2 -$2
Page 4 of 5
CONFORMITY ESTIMATES FOR EDUCATION, IRA, AND PENSION ISSUES (12/10/01 )
Enactment assumed after June 30, 2002
ACT AFFECTED
SECTION PROVISION EFFECTIVE FOOTNOTES TAX
2002-03 2003-04 2004-05
663 Repeal transition rule relating to certain highly compensated
employees pyba 12/31/01 negl. loss negl. loss negl. loss
664 Employees of tax-exempt entities DOE negl. effect
665 Treatment of employer-provided retirement advice yba 12/31/01 negl. effect
666 Repeal of multiple use test yba 12/31/01 considered in other provisions
Total -$44 -$48 -$59
NOTE: Details may not add to totals due to rounding.
a/ = ERISA implications
b/ = Without conforming legislation, existing plans potentially could be disqualified.
c/ = Baseline implication. Baseline revenue losses for eduction, IRA, and pension issues total ($ 40, $40, $60) million for FY 2002-3, 2003-4, 2004-5
and 2004-05.
aii TRA '97 = as if included in the Taxpayer Relief Act of 1997 pyba = plan years beginning after
da = distributions after rma = requests made after
cf = contributions for ta = transfers after
dma = distributions made after tdapma = transfers, distributions, and payments made after
DOE = date of enactment tyba = taxable years beginning after
frap = Federal regulations are prescribed yba = years beginning after
pateo/a = plan amendments taking effect on or after yea = years ending after
PIT = Personal Income Tax Corp = Corporation Franchise and Income Tax
Page 5 of 5
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