An Obama administration proposal that would ban employees from earning additional benefits once the value of benefits earned in all their retirement plans hit a current cap of $3.4 million would be confusing, difficult to administer, and discourage some employees from making new contributions, experts say.

And the intended result of the proposal — embedded in the administration's 2014 budget sent to lawmakers this month — a $9 billion boost to federal revenues over a 10-year period, may be illusory.

“What is the point? In the end, the money is going to be taxed,” said Anne Waidmann, a director with PricewaterhouseCoopers L.L.P. in Washington.

Under the proposal, no additional benefit accruals or contributions would be allowed once the combined value of an employee's retirement plan accounts was enough to buy a $205,000 annual lifetime and survivor annuity, beginning at age 62. The administration estimates, based on current interest rates, the maximum retirement plan accumulations needed for a person age 62 to buy such an annuity would be $3.4 million.

Affected retirement plans would include employer-sponsored defined benefit and defined contribution plans, such as 401(k), 403(b) and profit-sharing plans, as well as plans such as individual retirement accounts which employees established and made contributions.

Under the proposal, pension plan sponsors and IRA trustees would be required to provide to plan participants at the end of each calendar year a report on their account balances and accrued benefits, as well as contributions and benefit accruals earned that year.

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It then would be up to plan participants to determine the value of their defined contribution plan accounts, expressed as a joint and 100% survivor annuity that would be payable beginning at age 62.

That amount would be added to the value of benefits plan participants have earned from defined benefit plans, which also would be expressed as joint and 100% survivor annuity payable at age 62.

If the combined value of the retirement plan benefits and contributions exceed the maximum annual benefit that can be funded through a defined benefit plan, participants could not earn additional benefits the next year nor could contributions be made to their defined contribution plan accounts.

Benefit experts say only a small percentage of plan participants would be affected. An analysis by the Employee Benefit Research Institute looking only at 401(k) plan account balances found that well below 1% of participants would feel the effects of the retirement cap.

Such projections, though, are enormously volatile. For example, rising interest rates would significantly increase the value of a 401(k) account balance expressed as an annuity payable at age 62.

That could mean, for example, that in a year when interest rates were high, a participant might not be able to earn additional benefits or be entitled to 401(k) plan contributions.

But if interest rates were to sink, benefit accruals and contributions could resume. No adjustments, though, would be allowed for years benefits could not be earned or contributions made.

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“This would really complicate things and have unintended consequences,” said Kathryn Ricard, senior vice president-retirement policy with the ERISA Industry Committee in Washington. Just the imposition of a cap, for example, might lead some people to believe they couldn't contribute to a plan when in fact they could, Ms. Ricard said.

How individuals would have the expertise to make the necessary actuarial calculations to determine if they would be affected by the cap isn't clear. And without plan participants providing information on all their retirement plan accounts, including those from prior jobs, employers would be unable to do the calculations for their employees.

“What is the problem we are trying to solve?” asked Alan Glickstein, a senior retirement consultant with Towers Watson & Co. in Dallas. He said that current law already imposes annual limits on 401(k) plan contributions and the maximum benefit that can be funded through a defined benefit plan.

Also, retirement plan benefits are taxed when received, said Lynn Dudley, senior vice president-retirement and international benefits policy at the American Benefits Council in Washington.

If the proposal raises revenues, “That means people are saving less,” Ms. Dudley said, adding that policymakers should encourage employees to save more, not less.