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[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6324 Introduced in House (IH)]
<DOC>
119th CONGRESS
1st Session
H. R. 6324
To amend the Internal Revenue Code of 1986 to provide for in-service
rollovers for individual retirement annuity purchases.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
November 28, 2025
Mr. Panetta (for himself, Mr. LaHood, Mr. Miller of Ohio, Mr.
Fitzpatrick, Mr. Davis of Illinois, Mr. Moran, Ms. DelBene, and Mr.
Schneider) 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 provide for in-service
rollovers for individual retirement annuity purchases.
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 ``Retirement Simplification and
Clarity Act''.
SEC. 2. IN-SERVICE ROLLOVERS FOR ANNUITY PURCHASES.
(a) In General.--Section 401(k) of the Internal Revenue Code of
1986 is amended by adding at the end the following new paragraph:
``(17) Special rule for pre-retirement rollover.--
Notwithstanding the requirements of paragraph (2)(B)(i), a plan
may permit a participant who has attained age 50 or older to
elect a direct rollover of all or a portion the accrued benefit
of the participant attributable to employer contributions made
pursuant to the employee's election to an individual retirement
annuity (as defined in section 408(b)).''.
(b) Safe Harbor.--Section 402(f) of such Code is amended by
redesignating paragraph (2) as paragraph (3) and by inserting after
paragraph (1) the following new paragraph:
``(2) Safe harbor.--
``(A) In general.--A written explanation shall
satisfy the requirements of paragraph (1) if it
includes the following information in concise, plain
language:
``(i) The taxpayer has 30 days to review
such explanation before they must take any
action.
``(ii) Distributions made directly to the
taxpayer will be subject to income tax
withholding and added to gross income to the
extent taxable.
``(iii) The taxpayer may owe an additional
10 percent tax on a distribution issued before
the taxpayer attains age 59\1/2\.
``(iv) A 20 percent income tax withholding
will apply to distributions that are not
eligible for rollover.
``(v) A taxpayer can defer Federal income
tax on eligible distributions by rolling such
distribution over to another qualified plan or
individual retirement arrangement.
``(vi) A taxpayer may not rollover--
``(I) required minimum
distributions,
``(II) hardship distributions,
``(III) a series of payments to be
made over a number of years,
``(IV) employee stock ownership
plan dividends, or
``(V) corrective distributions.
``(vii) The plan administrator can be
contacted for information regarding whether all
or a portion of a payment to the taxpayer is
eligible for rollover.
``(viii) A plan may require the taxpayer to
take a distribution upon the taxpayer's
attainment of the plan's retirement age, or in
the case of a benefit that is less than $7,000,
the plan may automatically pay the benefit
directly to the taxpayer or in a rollover to a
traditional IRA or, for designated Roth
amounts, a Roth IRA it establishes for the
taxpayer.
``(ix) Eligible amounts may be rolled over
to a new plan or to an IRA when a taxpayer
changes jobs, and the administrator of the new
plan can confirm how to accomplish such a
rollover.
``(x) The taxpayer may choose to leave
eligible amounts in their original plan.
``(xi) The taxpayer may rollover an
eligible distribution to a traditional IRA,
individual retirement annuity, or a Roth IRA
for designated Roth contributions.
``(xii) Direct rollovers are not subject to
the mandatory 20 percent withholding, and the
distribution may be in the form of a check
payable to the new plan or arrangement or by
electronic transfer.
``(xiii) If the taxpayer receives a payment
directly, the taxpayer has up to 60 days from
the date of distribution to rollover an amount
equal to the eligible amount received plus the
dollar amount that was withheld and sent to the
Internal Revenue Service.
``(xiv) The taxpayer may obtain additional
information from the Internal Revenue Service.
``(B) Regulations and guidance.--The Secretary may
promulgate such regulations and guidance as are
necessary to administer this section, including
regulations updating the list in subparagraph (A) as
necessary.''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2025.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Ways and Means.
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