Members of Congress have introduced a bipartisan bill that could help workers move cash from Roth individual retirement accounts into Roth accounts in employer plans.
The Retirement Rollover Flexibility Act bill would make the process for moving cash from a Roth IRA into an employer plan Roth account more like moving cash from a traditional IRA into an employer plan.
The American Retirement Association is supporting the bill. Brian Graff, the association's chief executive officer, said in a comment that one reason the bill is necessary is that most state auto-IRA programs now make use of Roth IRAs the default. That means many more workers now have Roth IRAs.
What it means: Letting workers move cash from small Roth IRAs into employer plans will reduce the chances that the cash will leak out, Graff said.
But the bill could also add competition for advisors who want to attract retirement savers' Roth IRA assets themselves.
The legislative mechanics: LaHood, the lead sponsor of the House version of the bill, recently introduced the Retirement Simplification and Clarity Act, a bipartisan bill that could simplify the notice process for individuals ages 50 and older who roll cash from 401(k) plans into annuities.
Rep. Linda Sanchez, D-Calif., is a cosponsor in the House, and Sen. Michael Bennet, D-Colo., is a cosponsor in the Senate.
Members of Congress are looking for a way to buffer users of the Affordable Care Act public exchange system against huge increases in their share of the premium costs Jan. 1, 2026, when an emergency subsidy boost provided in response to the COVID-19 pandemic is set to expire.
A successful ACA subsidy extension bill could help ferry other financial services bills, such as IRA bills, through Congress.
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