What does Preamble of Retirement Simplification and Clarity Act do?

This bill proposes to amend the Internal Revenue Code of 1986. The amendment aims to provide for in-service rollovers for individual retirement annuity purchases.

What does SHORT TITLE. of Retirement Simplification and Clarity Act do?

This bill is formally titled the Retirement Simplification and Clarity Act.

What does IN-SERVICE ROLLOVERS FOR ANNUITY PURCHASES. of Retirement Simplification and Clarity Act do?

This section amends the Internal Revenue Code of 1986 to allow participants aged 50 or older to elect a direct rollover of accrued benefits attributable to employer contributions to an individual retirement annuity. It modifies safe harbor requirements by adding a new paragraph (2) to section 402(f), requiring a written explanation to include specific information for taxpayers. The written explanation must inform taxpayers about their options, including the possibility of rolling over distributions to qualified plans or IRAs, potential tax implications, and limitations on rollover eligibility. Certain distributions, such as required minimum distributions and hardship distributions, are not eligible for rollover. Plans may automatically pay benefits less than $7,000 directly or in a rollover to a traditional or Roth IRA. The Secretary is authorized to promulgate regulations and guidance to administer these changes. These amendments apply to taxable years beginning after December 31, 2025.

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Retirement Simplification and Clarity Act

Last updated: 11/28/2025 · Introduced: 11/28/2025

Author: Jimmy Panetta (D-CA)

TL;DR (AI)

This bill allows individuals aged 50 or older to directly roll over employer-contributed retirement benefits into individual retirement annuities.
It mandates that retirement plans provide written explanations detailing rollover options, tax implications, and eligibility limitations to participants.
The bill enables plans to automatically distribute benefits under $7,000 directly or as rollovers to traditional or Roth IRAs.

119th Congressin committeeOfficial page

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Other Sections

Includes provisions on preamble, short title., and 1 more.

3 sections

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