Retirement Simplification and Clarity Act
Latest action (29 Jul 2026): Introduced
What this bill does
S. 5156, the Retirement Simplification and Clarity Act, would amend the Internal Revenue Code of 1986 to change certain rules governing 401(k) plans and related distribution disclosures. First, it would allow 401(k) plans to permit participants age 50 or older to make an in-service direct rollover of employer contributions tied to the employee's own elective deferrals into an individual retirement annuity, even while the participant is still employed. Second, it would create a "safe harbor" written explanation that plan administrators could use to satisfy existing notice requirements when informing participants about eligible rollover distributions, specifying standardized plain-language content covering tax withholding, the additional tax on early distributions, rollover options and restrictions, and related procedural details. The Secretary of the Treasury would be authorized to issue regulations updating this list as needed.
The bill primarily affects participants in 401(k) retirement plans, particularly those age 50 and older who wish to move certain employer contributions into an individual retirement annuity before retiring, as well as plan administrators, who would gain a standardized, simplified way to meet disclosure obligations when participants take distributions. The changes would apply to taxable years beginning after December 31, 2026.
The bill was introduced in the Senate on July 29, 2026, by Senator Roger Marshall, with Senator Gillibrand as a cosponsor, and was referred to the Senate Committee on Finance. It has not yet been the subject of committee action, floor votes, or further legislative proceedings.
Plain-English summary generated by Bill100 AI from the official record. Always verify against the source below.
Official summary
This bill is in the first stage of the legislative process. It was introduced into Congress on July 29, 2026. It will typically be considered by committee next before it is possibly sent on to the House or Senate as a whole.
Common questions
- What does S. 5156 do?
- S. 5156, the Retirement Simplification and Clarity Act, would amend the Internal Revenue Code of 1986 to change certain rules governing 401(k) plans and related distribution disclosures. First, it would allow 401(k) plans to permit participants age 50 or older to make an in-service direct rollover of employer contributions tied to the employee's own elective deferrals into an individual retirement annuity, even while the participant is still employed. Second, it would create a "safe harbor" written explanation that plan administrators could use to satisfy existing notice requirements when informing participants about eligible rollover distributions, specifying standardized plain-language content covering tax withholding, the additional tax on early distributions, rollover options and restrictions, and related procedural details. The Secretary of the Treasury would be authorized to issue regulations updating this list as needed. The bill primarily affects participants in 401(k) retirement plans, particularly those age 50 and older who wish to move certain employer contributions into an individual retirement annuity before retiring, as well as plan administrators, who would gain a standardized, simplified way to meet disclosure obligations when participants take distributions. The changes would apply to taxable years beginning after December 31, 2026. The bill was introduced in the Senate on July 29, 2026, by Senator Roger Marshall, with Senator Gillibrand as a cosponsor, and was referred to the Senate Committee on Finance. It has not yet been the subject of committee action, floor votes, or further legislative proceedings.
- Has S. 5156 become law?
- Not yet. As of 29 Jul 2026, S. 5156 is introduced.
- Who sponsored S. 5156?
- S. 5156 was sponsored by Sen. Roger Marshall [R-KS] (Republican-KS), with 1 cosponsor.
- What's the latest action on S. 5156?
- Introduced (29 Jul 2026).
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