H.R. 6324

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6324 Introduced in House (IH)]

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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.
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