Retirement Simplification and Clarity Act

This bill amends the Internal Revenue Code to allow in-service rollovers from 401(k) plans to individual retirement annuities for participants aged 50 or older, and establishes a safe harbor for written explanations provided to taxpayers about distribution options.

Sec. 2, In-service rollovers for annuity purchases: This section amends section 401(k) to permit a plan to allow a participant who has attained age 50 or older to elect a direct rollover of all or a portion of their accrued benefit attributable to employer contributions made pursuant to the employee's election to an individual retirement annuity. It also amends section 402(f) to provide a safe harbor for written explanations that must include specific information in concise, plain language, such as the 30-day review period, tax withholding rules, the 10 percent additional tax for early distributions, rollover eligibility, and contact information for the plan administrator. The Secretary may issue regulations to administer this section. The amendments apply to taxable years beginning after December 31, 2024.