WASHINGTON – Deputy Treasury Secretary Samuel Bodman joined Sam Johnson (R-Texas) and Sen. Craig Thomas (R-Wyo.) at a March 31 press conference introducing new legislation that aims to implement President Bush’s proposal to create the Lifetime Savings Account. LSAs would allow everyone to contribute up to $5,000 each year to the account regardless of age or income status. Individuals will be able to convert existing tax-preferred savings into these new accounts in order to “consolidate and simplify their savings arrangements,” Bush has said. “Over the last several years, the personal savings rate has been on a steep decline,” Bodman said. “In 2002, the personal saving rate was revised down 1.4 points, from 3.7% to 2.3%. This is not acceptable. We must reduce the barriers to savings – and the simplicity and flexibility of LSAs does just that.” Bush has also proposed other savings accounts including an employer retirement savings account (ERSA) that would consolidate 401(k), SIMPLE 401(k), 403(b), and 457 employer-based defined contribution accounts into a single plan for employers. NAFCU has expressed its support for LSAs.

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