Retirement Simplification and Clarity Act

This bill would change federal tax law so that a 401(k) plan may let a participant age 50 or older move some or all of the money from their own elective contributions directly into an individual retirement annuity while still working. It would also create a "safe harbor" for the written notice plans must give before a distribution: a notice counts as meeting the legal requirement if it covers a set list of points in plain language, such as tax withholding, the 10 percent early-withdrawal tax, which payments cannot be rolled over, and the 60-day rollover window. The Treasury Secretary could issue rules to carry this out and update the list. The changes would apply to taxable years beginning after December 31, 2026.

Full text and official record on Congress.gov

Sponsors

• Roger Marshall Republican sponsor
• 1 cosponsors