The legislation, expanding on a similar bill that already passed the House by a wide margin, was approved unanimously by the Finance Committee. It would raise annual contribution limits to 401(k) plans from $10,500 to $15,000 and to IRAs from $2,000 to $5,000.
So-called catch-up provisions would allow people age 50 and older to contribute up to $7,500 a year to an IRA. A new 401(k) would be created in which, like the popular Roth IRA named for Sen. William Roth, R-Del., people would contribute after-tax dollars but withdraw them tax-free for retirement.
The Clinton administration, which favors creation of tax-subsidized retirement savings accounts, has not threatened a veto but is opposing the legislation in part over the questions about helping low-income people.