NU Online News Service, June 6, 4:25 p.m. – Diversified Investment Advisors Inc., Purchase, N.Y., says employers who participated in a recent survey it sponsored expect employees to contribute more to retirement savings programs as a result of the new Economic Growth and Tax Relief Reconciliation Act.
Researchers polled more than 200 U.S. human resources and benefits administrators about their views on the act, which will raise the current limits on retirement plan contributions.
Two-thirds of the survey participants predicted employees now participating in retirement savings plans would contribute more to the plans to take advantage of the new limits.
Seventy-seven percent of plan administrators said their companies would probably change plan rules in the next 12 months to allow workers to take advantage of the new, higher contribution limits.
The new legislation gradually increases the annual salary deferral limits for 401(k), 403(b) and 457 plans until they reach $15,000 in 2006. Individual Retirement Account contribution limits will rise to $5,000 by 2008, from $2,000.