I 

115TH CONGRESS 

1ST SESSION H. R. 2030 

To amend the Internal Revenue Code of 1986 to extend the rollover period 

for plan loan offset amounts and to modify the rules relating to hardship 

withdrawals from cash or deferred arrangements. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 6, 2017 

Mr. SAM JOHNSON of Texas (for himself and Mr. NEAL) 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 extend 

the rollover period for plan loan offset amounts and 

to modify the rules relating to hardship withdrawals from 

cash or deferred arrangements. 

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 ‘‘Savings Enhancement 

5 by Alleviating Leakage in 401(k) Savings Act’’. 


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1 SEC. 2. EXTENDED ROLLOVER PERIOD FOR PLAN LOAN 

2 OFFSET AMOUNTS. 

3 (a) IN GENERAL.—Paragraph (3) of section 402(c) 

4 of the Internal Revenue Code of 1986 is amended by re5 designating subparagraph (B) as subparagraph (C) and 

6 by inserting after subparagraph (A) the following new sub7 paragraph: 

8 ‘‘(B) ROLLOVER OF CERTAIN PLAN LOAN

9 OFFSET AMOUNTS.— 

10 ‘‘(i) IN GENERAL.—In the case of an 

11 eligible rollover distribution of a qualified 

12 plan loan offset amount, the requirements 

13 of subparagraph (A) shall be treated as 

14 met if such transfer occurs on or before 

15 the due date (including extensions) for fil16 ing the return of tax for the taxable year 

17 in which such amount is treated as distrib18 uted from a qualified employer plan. 

19 ‘‘(ii) QUALIFIED PLAN LOAN OFFSET

20 AMOUNT.—For purposes of this subpara21 graph, the term ‘qualified plan loan offset 

22 amount’ means a plan loan offset amount 

23 which is treated as distributed from a 

24 qualified employer plan to a participant or 

25 beneficiary solely by reason of— 


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1 ‘‘(I) the termination of the quali2 fied employer plan, or 

3 ‘‘(II) the failure to meet the re4 payment terms of the loan from such 

5 plan because of the severance from 

6 employment of the participant. 

7 ‘‘(iii) PLAN LOAN OFFSET AMOUNT.— 

8 For purposes of clause (ii), the term ‘plan 

9 loan offset amount’ means the amount by 

10 which the participant’s accrued benefit 

11 under the plan is reduced in order to repay 

12 a loan from the plan. 

13 ‘‘(iv) LIMITATION.—This subpara14 graph shall not apply to any plan loan off15 set amount unless such plan loan offset 

16 amount relates to a loan to which section 

17 72(p)(1) does not apply by reason of sec18 tion 72(p)(2). 

19 ‘‘(v) QUALIFIED EMPLOYER PLAN.— 

20 For purposes of this subsection, the term 

21 ‘qualified employer plan’ has the meaning 

22 given such term by section 72(p)(4).’’. 

23 (b) CONFORMING AMENDMENT.—Subparagraph (A) 

24 of section 402(c)(3) of the Internal Revenue Code of 1986 


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1 is amended by striking ‘‘subparagraph (B)’’ and inserting 

2 ‘‘subparagraphs (B) and (C)’’. 

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

4 this section shall apply to transfers made after December 

5 31, 2017. 

6 SEC. 3. MODIFICATION OF RULES GOVERNING HARDSHIP 

7 DISTRIBUTIONS. 

8 Not later than 1 year after the date of the enactment 

9 of this Act, the Secretary of the Treasury shall modify 

10 Treasury Regulation section 1.401(k)–1(d)(3)(iv)(E) to— 

11 (1) delete the prohibition imposed by paragraph 

12 (2) thereof; and 

13 (2) to make any other modifications necessary 

14 to carry out the purposes of section 

15 401(k)(2)(B)(i)(IV) of the Internal Revenue Code of 

16 1986. 

Æ 


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