I 

118TH CONGRESS 

2D SESSION H. R. 10467 

To amend the Internal Revenue Code of 1986 to provide for in-service 

rollovers for individual retirement annuity purchases. 

IN THE HOUSE OF REPRESENTATIVES 

DECEMBER 18, 2024 

Mr. PANETTA (for himself and Mr. LAHOOD) introduced the following bill; 

which was referred to the Committee on Ways and Means 

A BILL 

To amend the Internal Revenue Code of 1986 to provide 

for in-service rollovers for individual retirement annuity 

purchases. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Retirement Simplifica5 tion and Clarity Act’’. 

6 SEC. 2. IN-SERVICE ROLLOVERS FOR ANNUITY PURCHASES. 

7 (a) IN GENERAL.—Section 401(k) of the Internal 

8 Revenue Code of 1986 is amended by adding at the end 

9 the following new paragraph: 


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1 ‘‘(17) SPECIAL RULE FOR PRE-RETIREMENT

2 ROLLOVER.—Notwithstanding the requirements of 

3 paragraph (2)(B)(i), a plan may permit a partici4 pant who has attained age 50 or older to elect a di5 rect rollover of all or a portion the accrued benefit 

6 of the participant attributable to employer contribu7 tions made pursuant to the employee’s election to an 

8 individual retirement annuity (as defined in section 

9 408(b)).’’. 

10 (b) SAFE HARBOR.—Section 402(f) of such Code is 

11 amended by redesignating paragraph (2) as paragraph (3) 

12 and by inserting after paragraph (1) the following new 

13 paragraph: 

14 ‘‘(2) SAFE HARBOR.— 

15 ‘‘(A) IN GENERAL.—A written explanation 

16 shall satisfy the requirements of paragraph (1) 

17 if it includes the following information in con18 cise, plain language: 

19 ‘‘(i) The taxpayer has 30 days to re20 view such explanation before they must 

21 take any action. 

22 ‘‘(ii) Distributions made directly to 

23 the taxpayer will be subject to income tax 

24 withholding and added to gross income to 

25 the extent taxable. 


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1 ‘‘(iii) The taxpayer may owe an addi2 tional 10 percent tax on a distribution 

3 issued before the taxpayer attains age 

591 4 ⁄2. 

5 ‘‘(iv) A 20 percent income tax with6 holding will apply to distributions that are 

7 not eligible for rollover. 

8 ‘‘(v) A taxpayer can defer Federal in9 come tax on eligible distributions by rolling 

10 such distribution over to another qualified 

11 plan or individual retirement arrangement. 

12 ‘‘(vi) A taxpayer may not rollover— 

13 ‘‘(I) required minimum distribu14 tions, 

15 ‘‘(II) hardship distributions, 

16 ‘‘(III) a series of payments to be 

17 made over a number of years, 

18 ‘‘(IV) employee stock ownership 

19 plan dividends, or 

20 ‘‘(V) corrective distributions. 

21 ‘‘(vii) The plan administrator can be 

22 contacted for information regarding wheth23 er all or a portion of a payment to the tax24 payer is eligible for rollover. 


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1 ‘‘(viii) A plan may require the tax2 payer to take a distribution upon the tax3 payer’s attainment of the plan’s retirement 

4 age, or in the case of a benefit that is less 

5 than $7,000, the plan may automatically 

6 pay the benefit directly to the taxpayer or 

7 in a rollover to a traditional IRA or, for 

8 designated Roth amounts, a Roth IRA it 

9 establishes for the taxpayer. 

10 ‘‘(ix) Eligible amounts may be rolled 

11 over to a new plan or to an IRA when a 

12 taxpayer changes jobs, and the adminis13 trator of the new plan can confirm how to 

14 accomplish such a rollover. 

15 ‘‘(x) The taxpayer may choose to leave 

16 eligible amounts in their original plan. 

17 ‘‘(xi) The taxpayer may rollover an el18 igible distribution to a traditional IRA, in19 dividual retirement annuity, or a Roth IRA 

20 for designated Roth contributions. 

21 ‘‘(xii) Direct rollovers are not subject 

22 to the mandatory 20 percent withholding, 

23 and the distribution may be in the form of 

24 a check payable to the new plan or ar25 rangement or by electronic transfer. 


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1 ‘‘(xiii) If the taxpayer receives a pay2 ment directly, the taxpayer has up to 60 

3 days from the date of distribution to roll4 over an amount equal to the eligible 

5 amount received plus the dollar amount 

6 that was withheld and sent to the Internal 

7 Revenue Service. 

8 ‘‘(xiv) The taxpayer may obtain addi9 tional information from the Internal Rev10 enue Service. 

11 ‘‘(B) REGULATIONS AND GUIDANCE.—The 

12 Secretary may promulgate such regulations and 

13 guidance as are necessary to administer this 

14 section, including regulations updating the list 

15 in subparagraph (A) as necessary.’’. 

16 (c) EFFECTIVE DATE.—The amendments made by 

17 this section shall apply to taxable years beginning after 

18 December 31, 2024. 

Æ 


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