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[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 10467 Introduced in House (IH)]

<DOC>

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.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Retirement Simplification and 
Clarity Act''.

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

    (a) In General.--Section 401(k) of the Internal Revenue Code of 
1986 is amended by adding at the end the following new paragraph:
            ``(17) Special rule for pre-retirement rollover.--
        Notwithstanding the requirements of paragraph (2)(B)(i), a plan 
        may permit a participant who has attained age 50 or older to 
        elect a direct rollover of all or a portion the accrued benefit 
        of the participant attributable to employer contributions made 
        pursuant to the employee's election to an individual retirement 
        annuity (as defined in section 408(b)).''.
    (b) Safe Harbor.--Section 402(f) of such Code is amended by 
redesignating paragraph (2) as paragraph (3) and by inserting after 
paragraph (1) the following new paragraph:
            ``(2) Safe harbor.--
                    ``(A) In general.--A written explanation shall 
                satisfy the requirements of paragraph (1) if it 
                includes the following information in concise, plain 
                language:
                            ``(i) The taxpayer has 30 days to review 
                        such explanation before they must take any 
                        action.
                            ``(ii) Distributions made directly to the 
                        taxpayer will be subject to income tax 
                        withholding and added to gross income to the 
                        extent taxable.
                            ``(iii) The taxpayer may owe an additional 
                        10 percent tax on a distribution issued before 
                        the taxpayer attains age 59\1/2\.
                            ``(iv) A 20 percent income tax withholding 
                        will apply to distributions that are not 
                        eligible for rollover.
                            ``(v) A taxpayer can defer Federal income 
                        tax on eligible distributions by rolling such 
                        distribution over to another qualified plan or 
                        individual retirement arrangement.
                            ``(vi) A taxpayer may not rollover--
                                    ``(I) required minimum 
                                distributions,
                                    ``(II) hardship distributions,
                                    ``(III) a series of payments to be 
                                made over a number of years,
                                    ``(IV) employee stock ownership 
                                plan dividends, or
                                    ``(V) corrective distributions.
                            ``(vii) The plan administrator can be 
                        contacted for information regarding whether all 
                        or a portion of a payment to the taxpayer is 
                        eligible for rollover.
                            ``(viii) A plan may require the taxpayer to 
                        take a distribution upon the taxpayer's 
                        attainment of the plan's retirement age, or in 
                        the case of a benefit that is less than $7,000, 
                        the plan may automatically pay the benefit 
                        directly to the taxpayer or in a rollover to a 
                        traditional IRA or, for designated Roth 
                        amounts, a Roth IRA it establishes for the 
                        taxpayer.
                            ``(ix) Eligible amounts may be rolled over 
                        to a new plan or to an IRA when a taxpayer 
                        changes jobs, and the administrator of the new 
                        plan can confirm how to accomplish such a 
                        rollover.
                            ``(x) The taxpayer may choose to leave 
                        eligible amounts in their original plan.
                            ``(xi) The taxpayer may rollover an 
                        eligible distribution to a traditional IRA, 
                        individual retirement annuity, or a Roth IRA 
                        for designated Roth contributions.
                            ``(xii) Direct rollovers are not subject to 
                        the mandatory 20 percent withholding, and the 
                        distribution may be in the form of a check 
                        payable to the new plan or arrangement or by 
                        electronic transfer.
                            ``(xiii) If the taxpayer receives a payment 
                        directly, the taxpayer has up to 60 days from 
                        the date of distribution to rollover an amount 
                        equal to the eligible amount received plus the 
                        dollar amount that was withheld and sent to the 
                        Internal Revenue Service.
                            ``(xiv) The taxpayer may obtain additional 
                        information from the Internal Revenue Service.
                    ``(B) Regulations and guidance.--The Secretary may 
                promulgate such regulations and guidance as are 
                necessary to administer this section, including 
                regulations updating the list in subparagraph (A) as 
                necessary.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2024.
                                 <all>
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