Train the Future Act

Summary: Train the Future Act  This bill amends the Internal Revenue Code to allow an early distribution, without penalty, from a qualified retirement plan to an employee who is serving as a mentor. The bill defines &quot;mentor&quot; as a working individual who: (1) has attained age 55; (2) works reduced hours and engages in mentoring activities for at least 20% of such hours; and (3) is responsible for the training and education of employees or students in an area of expertise for which such individual has a professional credential, certificate, or degree. 

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Train the Future Act''.

SEC. 2. ENCOURAGING MENTORS TO TRAIN THE FUTURE.

    (a) Early Distributions From Qualified Retirement Plans.--Section 
72(t)(2) of the Internal Revenue Code of 1986 is amended--
            (1) in subparagraph (A)--
                    (A) by striking ``or'' at the end of clause (vii);
                    (B) by striking the period at the end of clause 
                (viii) and inserting ``, or''; and
                    (C) by adding at the end the following new clause:
                            ``(ix) made to an employee who is serving 
                        as a mentor.''; and
            (2) by adding at the end the following new subparagraph:
                    ``(H) Distributions to mentors.--For purposes of 
                this paragraph, the term `mentor' means an individual 
                who--
                            ``(i) has attained 55 years of age,
                            ``(ii) is not separated from their 
                        employment with a company, corporation, or 
                        institution of higher education,
                            ``(iii) in accordance with such 
                        requirements and standards as the Secretary 
                        determines to be necessary, has substantially 
                        reduced their hours of employment with their 
                        employer, with the individual to be engaged in 
                        mentoring activities described in clause (iv) 
                        for not less than 20 percent of the hours of 
                        employment after such reduction, and
                            ``(iv) is responsible for the training and 
                        education of employees or students in an area 
                        of expertise for which the individual has a 
                        professional credential, certificate, or 
                        degree.''.
    (b) Distributions During Working Retirement.--Paragraph (36) of 
section 401(a) of the Internal Revenue Code of 1986 is amended to read 
as follows:
            ``(36) Distributions during working retirement.--
                    ``(A) In general.--A trust forming part of a 
                pension plan shall not be treated as failing to 
                constitute a qualified trust under this section solely 
                because the plan provides that a distribution may be 
                made from such trust to an employee who--
                            ``(i) has attained age 62 and who is not 
                        separated from employment at the time of such 
                        distribution, or
                            ``(ii) subject to subparagraph (B), is 
                        serving as a mentor (as such term is defined in 
                        section 72(t)(2)(H)).
                    ``(B) Limitation on distributions to mentors.--For 
                purposes of subparagraph (A)(ii), the amount of the 
                distribution made to an employee who is serving as a 
                mentor shall not be greater than the amount equal to 
                the product obtained by multiplying--
                            ``(i) the amount of the distribution that 
                        would have been payable to the employee if such 
                        employee had separated from employment instead 
                        of reducing their hours of employment with 
                        their employer and engaging in mentoring 
                        activities, in accordance with clauses (iii) 
                        and (iv) of section 72(t)(2)(H), by
                            ``(ii) the percentage equal to the quotient 
                        obtained by dividing--
                                    ``(I) the sum of--
                                            ``(aa) the number of hours 
                                        per pay period by which the 
                                        employee's hours of employment 
                                        are reduced, and
                                            ``(bb) the number of hours 
                                        of employment that such 
                                        employee is engaging in 
                                        mentoring activities, by
                                    ``(II) the total number of hours 
                                per pay period worked by the employee 
                                before such reduction in hours of 
                                employment.''.
    (c) ERISA.--Subparagraph (A) of section 3(2) of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 1002(2)) is amended 
by striking the period at the end and inserting the following: ``, or 
solely because such distribution is made to an employee who is serving 
as a mentor (as such term is defined in section 72(t)(2)(H) of the 
Internal Revenue Code of 1986).''.
    (d) Application.--The amendments made by this section shall apply 
to distributions made in taxable years beginning after December 31, 
2015.