Savings Enhancement by Alleviating Leakage in 401(k) Savings Act

Bill: 115-hr-2030
Sponsor: full_name: Rep. Johnson, Sam [R-TX-3]
Introduced: 2017-04-06
Policy area: Taxation
Subjects: Administrative law and regulatory procedures

Consumer credit

Department of the Treasury

Employee benefits and pensions

Income tax exclusion
Latest action: action_date: 2017-04-06
text: Referred to the House Committee on Ways and Means.

Summaries:
action_date: 2017-04-06
action_desc: Introduced in House
text: <p><b>Savings Enhancement by Alleviating Leakage in 401(k) Savings Act</b> </p> <p>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.</p> <p>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.</p>

tv_txt: I 115th CONGRESS 1st Session H. R. 2030 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. Short title This Act may be cited as the Savings Enhancement by Alleviating Leakage in 401(k) Savings Act . 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. 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.