SMART Savings Act of 2026
Sponsored By: Representative Tenney, Claudia [R-NY-24]
Introduced
Summary
Redefines which accounts count as retirement "plans" for prohibited-transaction rules. This bill would clarify that certain tax-exempt 401(a) trusts and 403(a) plans count as "plans," reorganize the prohibited-transaction exemptions, define "relationship benefits," and preserve anti-self-dealing rules that can cause an IRA to cease.
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- Savers and IRA owners: Would broaden which individual-account arrangements fall under the exemptions, potentially enabling different fee or benefit structures. Self-dealing still triggers IRA cessation for the taxable year except for narrowly defined "relationship benefits."
- Employers and plan sponsors: Trusts tied to 401(a) plans and 403(a) plans that are tax-exempt would be explicitly treated as "plans" for prohibited-transaction rules. The bill treats separate employer-maintained accounts as separate IRAs.
- Financial firms and advisers: The proposal would recast the exemption framework for disallowed transactions and spell out "relationship benefits" such as reduced-cost or enhanced services tied to account value or fees.
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Bill Overview
Analyzed Economic Effects
2 provisions identified: 0 benefits, 0 costs, 2 mixed.
New IRA self-dealing and benefits
If enacted, the bill would tighten IRA self-dealing rules. If an IRA owner or beneficiary uses plan income or assets for their own account, the IRA would stop being an IRA as of the first day of that taxable year. That could make the account treated as a taxable distribution and cause tax and penalties. The bill would also say getting reduced-cost or enhanced products or services tied to your IRA balance or fees would not by itself trigger that rule. These changes would apply to transactions after the date of enactment.
More employer trusts treated as plans
If enacted, the bill would change which employer trusts and plans count as a "plan" for prohibited-transaction rules. A trust described in 401(a) that is tax-exempt under 501(a), and a 403(a) plan that is tax-exempt, would be treated as a "plan" for those rules. That would bring some employer or association individual-account arrangements under stricter prohibited-transaction limits. Employers, plan sponsors, and affected workers would see the change for transactions after the date of enactment.
Sponsors & CoSponsors
Sponsor
Tenney, Claudia [R-NY-24]
NY • R
Cosponsors
There are no cosponsors for this bill.
Roll Call Votes
No roll call votes available for this bill.
View on Congress.gov