I
103D CONGRESS
2D SESSION
H. R. 3758
To amend the Internal Revenue Code of 1986 to allow reservists called
to active duty for certain purposes to make penalty-free withdrawals
from certain retirement plans to the extent of lost income while on
active duty.
IN THE HOUSE OF REPRESENTATIVES
FEBRUARY 1, 1994
Mr. WALKER 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 allow re-
servists called to active duty for certain purposes to
make penalty-free withdrawals from certain retirement
plans to the extent of lost income while on active duty.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. PENALTY-FREE DISTRIBUTIONS FROM CER-
TAIN RETIREMENT PLANS FOR RESERVISTS
CALLED TO ACTIVE DUTY FOR CERTAIN
PURPOSES.
(a) IN GENERAL.—Paragraph (2) of section 72(t) of
the Internal Revenue Code of 1986 (relating to exceptions
to 10-percent additional tax on early distributions from
qualified retirement plans) is amended by adding at the
end thereof the following new subparagraph:
‘‘(D) DISTRIBUTIONS
FOR
RESERVISTS
SERVING ON ACTIVE DUTY FOR CERTAIN PUR-
POSES.—Any qualified reservist distribution (as
defined in paragraph (6)) from an individual re-
tirement plan or from amounts attributable to
employer contributions made pursuant to elec-
tive deferrals described in subparagraph (A) or
(C) 
of 
section 
402(g)(3) 
or 
section
501(c)(18)(D)(iii).’’
(b) QUALIFIED RESERVIST DISTRIBUTION.—Sub-
section (t) of section 72 of such Code is amended by add-
ing at the end thereof the following new paragraph:
‘‘(6) QUALIFIED
RESERVIST
DISTRIBUTION.—
For purposes of paragraph (2)(D)—
‘‘(A) IN
GENERAL.—The term ‘qualified
reservist distribution’ means any distribution or
payment to a qualified reservist during the eli-
gible distribution period.
‘‘(B) LIMITATION
ON
AMOUNT.—Para-
graph (2)(D) shall not apply to the extent that
the aggregate amount withdrawn during the eli-
gible distribution period exceeds the excess (if
any) of—
‘‘(i) the amount earned income which
such individual would have received during
the eligible distribution period but for serv-
ing on active duty as described in subpara-
graph (C), over
‘‘(ii) the earned income received dur-
ing such period.
‘‘(C) QUALIFIED
RESERVIST.—For pur-
poses of this paragraph, the term ‘qualified re-
servist’ means any member of a reserve compo-
nent of the Armed Forces of the United States
who is called or ordered to active duty in sup-
port of a contingency operation (as defined in
section 101 of title 10, United States Code).
‘‘(D) ELIGIBLE DISTRIBUTION PERIOD.—
For purposes of this paragraph, the term ‘eligi-
ble distribution period’ means the period the in-
dividual is serving on active duty as described
in subparagraph (C).’’
(c) CONFORMING AMENDMENTS.—
(1) Section 401(k)(2)(B)(i) of such Code is
amended by striking ‘‘or’’ at the end of subclause
(III), by striking ‘‘and’’ at the end of subclause (IV)
and inserting ‘‘or’’, and by inserting after subclause
(IV) the following new subclause:
‘‘(V) the date on which qualified
reservist distributions (as defined in
section 72(t)(6)) are made, and’’.
(2) Section 403(b)(11) of such Code is amend-
ed by striking ‘‘or’’ at the end of subparagraph (A),
by striking the period at the end of subparagraph
(B) and inserting ‘‘, or’’, and by inserting after sub-
paragraph (B) the following new subparagraph:
‘‘(C) for qualified reservist distributions
(as defined in section 72(t)(6)).’’
(d) EFFECTIVE DATE.—The amendments made by
this section shall apply to distributions after the date of
the enactment of this Act.
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