Retirement Simplification and Clarity Act
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Progress
Where this bill stands in the legislative process.
- Introduced
- Passed House
- Passed Senate
- To President
- Became Law
Overview
This bill, the Retirement Simplification and Clarity Act, amends the Internal Revenue Code to allow for ‘in-service rollovers’ for individual retirement annuity purchases. Specifically, it permits individuals age 50 or older to roll over accrued benefits from their 401(k) plans directly into an individual retirement annuity. The bill also includes detailed requirements for written explanations regarding rollovers, including tax withholding rules and restrictions on eligible distributions.
Key provisions
- Allows 401(k) participants age 50 or older to roll over accrued benefits into individual retirement annuities.
- Requires written explanations for rollovers to include specific information about tax implications.
- Establishes rules regarding tax withholding and potential penalties on distributions.
- Lists specific types of distributions that cannot be rolled over.
- Provides a 60-day window to complete a rollover after receiving a distribution.
- Allows rollovers upon job changes.
- Permits taxpayers to choose to leave funds in their original plan.
- Specifies that direct rollovers are not subject to the standard 20% withholding.
Who is affected
- Employees participating in 401(k) plans
- Employers offering 401(k) plans
- Individuals age 50 or older
- Financial institutions offering individual retirement annuities
- The Internal Revenue Service
Bill text
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Sponsors
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24 on record
Primary sponsor
Cosponsors
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