A bipartisan bill that would allow retirement savers to roll over their Roth IRA savings into a Roth account within a workplace retirement plan was introduced in the House on Wednesday by U.S. Representatives Darin LaHood (R-IL) and Linda T. Sánchez (D-CA).
“Building retirement security is critical to the longevity and strength of our economy,” said Rep. LaHood. “Our bipartisan bill will allow for the consolidation of assets, reduce the potential for duplicative fees, and bolster retirement savings for families across the country. As workers face rising costs and burdensome interest rates, Congress should continue to find solutions to help workers build for a comfortable retirement. I am proud to join my Ways and Means colleague, Rep. Sanchez, on this commonsense, bipartisan legislation.”
Current law prohibits workers from rolling Roth IRA savings into workplace-based Roth retirement plans offered by employers. LaHood and Sánchez’s bill would specifically allow the transfer of contributions from Roth IRA plans to a workplace designated Roth account, such as a Roth 401(k), Roth 403(b), or Roth 457(b).
“Nearly 7 million Americans use Roth IRA accounts to save for retirement. As that number continues to grow rapidly across the country, we must ensure workers can roll their savings into designated Roth accounts within a workplace-based retirement plan,” Sánchez said. “I’m proud to co-lead this bipartisan bill with Congressman LaHood so that retirement savers can rollover and boost their retirement savings, ultimately allowing them to enjoy a comfortable retirement in the future.”
The bill has the support of the American Retirement Association.
“We applaud Reps. LaHood and Sánchez for introducing this sensible proposal. Allowing workers to move their Roth IRA balances into designated Roth accounts in a workplace retirement plan would benefit workers in several ways, including the reduction of duplicative fees inherent in maintaining multiple accounts and reduced retirement savings leakage by allowing the seamless transfer of Roth savings through the auto-portability process,” ARA CEO Brian Graff said. “These changes will be even more important as state auto-IRA programs grow.”
The new bill builds off of previous legislation championed by Reps. LaHood and Sánchez, the Starter-K Act, which was included in the SECURE 2.0 retirement package signed into law at the end of 2022. The Starter-K Act created “starter” defined contribution plans to allow more small businesses to offer retirement plans to their employees.
SEE ALSO:
• Bipartisan ‘Starter-K’ Retirement Bill Introduced in the House
• IRS Comes Through with Roth Catch-Up Contribution Deadline Extension