Retirement Simplification and Clarity Act
Sponsored By: Representative Panetta
Introduced
Summary
Would create an in‑service rollover option allowing workers age 50 or older to move employer‑contributed 401(k) accrued benefits into an individual retirement annuity (IRA annuity) while still employed. It would also require expanded, plain-language safe-harbor notices that explain tax, withholding, timing, and rollover choices.
Show full summary
- Workers 50 or older would be able to directly roll all or part of the accrued benefit attributable to employer contributions into an IRA annuity before retirement. This applies to employer contributions made pursuant to the employee’s election.
- All plan participants would get a standardized, plain-language explanation that includes a 30-day review period before action and a 60-day window to complete a rollover if a distribution is received. The notice must list key tax and withholding considerations and available rollover options.
- Plan administrators would be required to provide the new safe-harbor disclosures and could rely on Treasury and IRS regulations and guidance to update the required disclosure items over time.
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Bill Overview
Analyzed Economic Effects
2 provisions identified: 2 benefits, 0 costs, 0 mixed.
Clearer rollover notices from retirement plans
If enacted, plans could use a short plain-language notice to meet federal rollover rules for tax years beginning after December 31, 2025. The notice would give you 30 days to review and explain taxes and withholding, including the 10% early withdrawal tax. It would list payments that usually cannot be rolled over, your choices when changing jobs, and whether you can leave money in the plan. It would explain that direct rollovers avoid the 20% withholding, how the 60-day rollover window works, and include plan and IRS contacts. For balances under $7,000, it would explain possible automatic payments or rollovers to an IRA.
Workplace plan rollovers at age 50
If enacted, some workplace retirement plans could let you, at age 50 or older, move money by direct rollover to an individual retirement annuity. You could roll over all or part of your accrued benefit from employer contributions made under your election. Plans would choose whether to offer this option, and it would apply for tax years beginning after December 31, 2025.
Sponsors & CoSponsors
Sponsor
Panetta
CA • D
Cosponsors
LaHood
IL • R
Sponsored 11/28/2025
Miller (OH)
OH • R
Sponsored 11/28/2025
Fitzpatrick
PA • R
Sponsored 11/28/2025
Davis (IL)
IL • D
Sponsored 11/28/2025
Moran
TX • R
Sponsored 11/28/2025
DelBene
WA • D
Sponsored 11/28/2025
Schneider
IL • D
Sponsored 11/28/2025
Bresnahan
PA • R
Sponsored 12/19/2025
Walkinshaw
VA • D
Sponsored 4/2/2026
Roll Call Votes
No roll call votes available for this bill.
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