Title: Compassionate Retirement Act of 2019
Policy area: Taxation

Summary:
Kathryn Manginelli Act of 2019 or the Compassionate Retirement Act of  2019
This bill permits early distributions, without penalty, from tax-preferred pension plans to individuals diagnosed with a terminal illness (i.e., an illness or physical condition that can be reasonably expected to result in death seven years after diagnosis).

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 2495 Introduced in Senate (IS)]

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116th CONGRESS
  1st Session
                                S. 2495

To amend the Internal Revenue Code of 1986 to establish an exception to 
the penalty on early distributions from qualified plans for individuals 
               diagnosed with certain terminal illnesses.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           September 18, 2019

 Mr. Burr (for himself and Mr. Bennet) introduced the following bill; 
     which was read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
To amend the Internal Revenue Code of 1986 to establish an exception to 
the penalty on early distributions from qualified plans for individuals 
               diagnosed with certain terminal illnesses.

    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 ``Kathryn Manginelli Act of 2019'' or 
the ``Compassionate Retirement Act of 2019''.

SEC. 2. EXCEPTION TO PENALTY ON EARLY DISTRIBUTIONS FROM QUALIFIED 
              PLANS FOR INDIVIDUALS WITH A TERMINAL ILLNESS.

    (a) In General.--Section 72(t)(2) of the Internal Revenue Code of 
1986 is amended by adding at the end the following new subparagraph:
                    ``(H) Terminal illness.--
                            ``(i) In general.--Distributions which are 
                        made to the employee on or after the date on 
                        which such employee has been diagnosed with a 
                        terminal illness.
                            ``(ii) Definition.--For purposes of this 
                        subparagraph, the term `terminal illness' means 
                        an illness or physical condition, as diagnosed 
                        by a physician (as defined in section 
                        1861(r)(1) of the Social Security Act (42 
                        U.S.C. 1395x(r)(1))), which can reasonably be 
                        expected to result in death in 7 years or less 
                        after the date of such diagnosis.
                            ``(iii) Documentation.--For purposes of 
                        this subparagraph, an employee shall not be 
                        considered to have been diagnosed with a 
                        terminal illness described in clause (i) unless 
                        such employee furnishes sufficient evidence in 
                        such form and manner as the Secretary may 
                        require.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to distributions after the date of the enactment of this Act.
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