[Congressional Record (Bound Edition), Volume 161 (2015), Part 8]
[House]
[Page 11380]
[From the U.S. Government Publishing Office, www.gpo.gov]




                TIME TO STREAMLINE SIMPLE IRA ROLLOVERS

  The SPEAKER pro tempore. The Chair recognizes the gentlewoman from 
North Carolina (Ms. Foxx) for 5 minutes.
  Ms. FOXX. Mr. Speaker, in 1966, Federal legislation established a new 
type of employer-sponsored retirement plan known as a SIMPLE IRA. These 
plans are designed to give small businesses a retirement option for 
their employees without the administrative burdens of other employer-
sponsored retirement plan types.
  SIMPLE IRAs face a 25 percent early withdrawal penalty during the 
first 2 years of their existence, compared to 10 percent for other 
IRAs. In order to prevent accountholders from unknowingly rolling their 
IRA funds into SIMPLE IRAs and being surprised by an increased early 
retirement penalty, current law prohibits rolling funds over into a 
SIMPLE IRA from other retirement accounts.
  However, SIMPLE IRAs have the same early withdrawal penalty as other 
IRAs after that initial 2-year period, and consumers and financial 
planners have struggled with the rollover restrictions as they attempt 
to consolidate accounts.
  This week, I will introduce legislation to allow for rollovers into 
SIMPLE IRA accounts that have met the 2-year threshold. The Joint 
Committee on Taxation has previously estimated this legislation would 
have a negligible effect on Federal tax revenues. This bill will 
simplify retirement planning and ensure a complex Tax Code does not 
prevent sensible financial planning decisions. Individuals should be 
able to consolidate their retirement funds in a way that best meets 
their needs.
  This legislation is a small but important first step in the long road 
to ensuring our tax system works for Americans, not against them.

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