I 
112TH CONGRESS 
1ST SESSION H. R. 3287 
To amend the Internal Revenue Code of 1986 to modify the rules relating 
to loans made from a qualified employer plan, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
NOVEMBER 1, 2011 
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 modify 
the rules relating to loans made from a qualified em-
ployer plan, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Savings Enhancement 
by Alleviating Leakage in 401(k) Savings Act of 2011’’ 
or the ‘‘SEAL 401(k) Savings Act’’. 
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SEC. 2. EXTENDED ROLLOVER PERIOD FOR THE ROLLOVER 
OF PLAN LOAN OFFSET AMOUNTS IN CER-
TAIN CASES. 
(a) IN GENERAL.—Paragraph (3) of section 402(c) 
of the Internal Revenue Code of 1986 is amended by add-
ing at the end the following new subparagraph: 
‘‘(C) ROLLOVER OF CERTAIN PLAN LOAN 
OFFSET AMOUNTS.— 
‘‘(i) IN GENERAL.—In the case of a 
qualified plan loan offset amount, para-
graph (1) shall not apply to any transfer 
of such amount made after the due date 
(including extensions) for filing the return 
of tax for the taxable year in which such 
amount is treated as distributed from a 
qualified employer plan. 
‘‘(ii) QUALIFIED PLAN LOAN OFFSET 
AMOUNT.—For purposes of this subpara-
graph, the term ‘qualified plan loan offset 
amount’ means a plan loan offset amount 
which is treated as distributed from a 
qualified employer plan to a participant or 
beneficiary solely by reason of— 
‘‘(I) the termination of the quali-
fied employer plan, or 
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‘‘(II) the failure to meet the re-
payment terms of the loan from such 
plan because of the separation from 
service of the participant (whether 
due to layoff, cessation of business, 
termination of employment, or other-
wise). 
‘‘(iii) PLAN LOAN OFFSET AMOUNT.— 
For purposes of clause (ii), the term ‘plan 
loan offset amount’ means the amount by 
which the participant’s accrued benefit 
under the plan is reduced in order to repay 
a loan from the plan. 
‘‘(iv) 
LIMITATION.—This 
subpara-
graph shall not apply to any plan loan off-
set amount unless such plan loan offset 
amount relates to a loan to which section 
72(p)(1) does not apply by reason of sec-
tion 72(p)(2). 
‘‘(v) QUALIFIED EMPLOYER PLAN.— 
For purposes of this subsection, the term 
‘qualified employer plan’ has the meaning 
given such term by section 72(p)(4).’’. 
(b) CONFORMING AMENDMENT.—Subparagraph (A) 
of section 402(c)(3) of the Internal Revenue Code of 1986 
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is amended by striking ‘‘subparagraph (B)’’ and inserting 
‘‘subparagraphs (B) and (C)’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to transfers made after the date 
of the enactment of this Act. 
SEC. 3. MODIFICATION OF RULES GOVERNING HARDSHIP 
DISTRIBUTIONS. 
Not later than 1 year after the date of the enactment 
of this Act, the Secretary of the Treasury shall modify 
Treasury Regulation section 1.401(k)–1(d)(3)(iv)(E) to— 
(1) delete the prohibition imposed by paragraph 
(2) thereof, and 
(2) to make any other modifications necessary 
to 
carry 
out 
the 
purposes 
of 
section 
401(k)(2)(B)(i)(IV) of the Internal Revenue Code of 
1986. 
Æ 
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