We don’t know the details on this proposal but from what I understand, the basic idea is to limit future contributions once the total accumulations in an individual’s plans, IRAs, etc. exceeds the amount needed to generate an annual income of $205,000 per year at age 62. That’s equivalent to about $3,400,000.
I’m not positive, but I’m pretty sure they are not talking about confiscating or taxing the “extra” money, just not allowing additional contributions.
It’s a wonk-ish sort of thing that makes a little sense if you are familiar with pension law, but on a practical level it’s pretty silly (we do have all sorts of limits on the amounts going in already, and eventually, the government will be getting its tax revenue anyway), and won’t affect many participants or raise that much revenue (although, as Everitt Dirksen supposedly once said “a billion here, a billion there, and pretty soon you’re talking real money”).
I’ll try to keep an eye on this and provide updates.