Title: Savings Enhancement by Alleviating Leakage in 401(k) Savings Act
Policy area: Taxation

Summary:
Savings Enhancement by Alleviating Leakage in 401(k) Savings Act
This bill amends the Internal Revenue Code, with respect to loans made from a qualified employer plan, to extend the period for repayment of loans if a plan terminates or a plan participant becomes unemployed.
The bill also requires the Department of the Treasury to modify regulations governing hardship distributions from qualified employer plans to allow participants to make additional contributions to a plan during the six-month period following a hardship distribution.

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2030 Introduced in House (IH)]

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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.

    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 ``Savings Enhancement by Alleviating 
Leakage in 401(k) Savings Act''.

SEC. 2. EXTENDED ROLLOVER PERIOD FOR PLAN LOAN OFFSET AMOUNTS.

    (a) In General.--Paragraph (3) of section 402(c) of the Internal 
Revenue Code of 1986 is amended by redesignating subparagraph (B) as 
subparagraph (C) and by inserting after subparagraph (A) the following 
new subparagraph:
                    ``(B) Rollover of certain plan loan offset 
                amounts.--
                            ``(i) In general.--In the case of an 
                        eligible rollover distribution of a qualified 
                        plan loan offset amount, the requirements of 
                        subparagraph (A) shall be treated as met if 
                        such transfer occurs on or before 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 subparagraph, 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 
                                qualified employer plan, or
                                    ``(II) the failure to meet the 
                                repayment terms of the loan from such 
                                plan because of the severance from 
                                employment of the participant.
                            ``(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 subparagraph shall 
                        not apply to any plan loan offset amount unless 
                        such plan loan offset amount relates to a loan 
                        to which section 72(p)(1) does not apply by 
                        reason of section 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 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 December 31, 2017.

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.
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