HR 6324 — Retirement Simplification and Clarity Act

Bill Text

• Introduced Introduced in House Current html November 28, 2025

AI-generated reading aid from the bill's amendatory text — verify against the official bill.

This bill allows individuals aged 50 or older to make in-service rollovers of their employer contributions to an individual retirement annuity and sets forth new requirements for explanation of rollover options.

• Section 401(k)

  (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)).

  This adds a new provision that allows individuals over age 50 to roll over their employer contributions to an individual retirement annuity.

• Section 402(f)

  Paragraph (2) → Paragraph (3)

  This redesignates an existing paragraph to make room for new provisions regarding safe harbor explanations for rollovers.

• Section 402(f)

  (2) Safe harbor.-- A written explanation shall satisfy the requirements of paragraph (1) if it includes the following information in concise, plain language: The taxpayer has 30 days to review such explanation before they must take any action. Distributions made directly to the taxpayer will be subject to income tax withholding and added to gross income to the extent taxable. The taxpayer may owe an additional 10 percent tax on a distribution issued before the taxpayer attains age 59\1/2\. A 20 percent income tax withholding will apply to distributions that are not eligible for rollover. A taxpayer can defer Federal income tax on eligible distributions by rolling such distribution over to another qualified plan or individual retirement arrangement. A taxpayer may not rollover-- required minimum distributions, hardship distributions, a series of payments to be made over a number of years, employee stock ownership plan dividends, or corrective distributions. The plan administrator can be contacted for information regarding whether all or a portion of a payment to the taxpayer is eligible for rollover. 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. 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. The taxpayer may choose to leave eligible amounts in their original plan. The taxpayer may rollover an eligible distribution to a traditional IRA, individual retirement annuity, or a Roth IRA for designated Roth contributions. 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. 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. The taxpayer may obtain additional information from the Internal Revenue Service.

  This introduces a comprehensive safe harbor provision that outlines required rollover information that must be provided to taxpayers.

Action History

1. November 28, 2025

   Introduced in House

2. November 28, 2025

   Introduced in House

3. November 28, 2025

   Referred to the House Committee on Ways and Means.

Sponsors

• Jimmy Panetta · Primary
• Darin LaHood · Cosponsor
• Max L. Miller · Cosponsor
• Brian K. Fitzpatrick · Cosponsor
• Danny K. Davis · Cosponsor
• Nathaniel Moran · Cosponsor
• Suzan K. DelBene · Cosponsor
• Bradley Scott Schneider · Cosponsor
• Robert P. Bresnahan · Cosponsor
• James R. Walkinshaw · Cosponsor
• Josh Riley · Cosponsor
• Glenn Thompson · Cosponsor
• Zoe Lofgren · Cosponsor
• Zachary Nunn · Cosponsor
• Thomas R. Suozzi · Cosponsor
• Monica De La Cruz · Cosponsor
• Nicholas J. Begich · Cosponsor
• Jesús G. "Chuy" García · Cosponsor
• Mike Kelly · Cosponsor
• Donald Norcross · Cosponsor

Subjects