SAFER Act

I 117TH CONGRESS 1ST SESSION H. R. 2953 To amend the Internal Revenue Code of 1986 to allow penalty-free withdrawals from retirement plans for domestic abuse victims. IN THE HOUSE OF REPRESENTATIVES MAY 4, 2021 Mrs. MCBATH (for herself, Ms. MOORE of Wisconsin, and Mr. SMUCKER) in- troduced the following bill; which was referred to the Committee on Ways and Means A BILL To amend the Internal Revenue Code of 1986 to allow pen- alty-free withdrawals from retirement plans for domestic abuse victims. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Savings Access For 4 Escaping and Rebuilding Act of 2021’’ or the ‘‘SAFER 5 Act’’. 6 VerDate Sep 11 2014 20:35 Jun 09, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H2953.IH H2953 pamtmann on DSKBC07HB2PROD with BILLS 2 •HR 2953 IH SEC. 2. PENALTY-FREE WITHDRAWALS FROM RETIREMENT 1 PLANS FOR INDIVIDUALS IN CASE OF DOMES- 2 TIC ABUSE. 3 (a) IN GENERAL.—Section 72(t)(2) of the Internal 4 Revenue Code of 1986 is amended by adding at the end 5 the following new subparagraph: 6 ‘‘(I) DISTRIBUTIONS FROM RETIREMENT 7 PLAN IN CASE OF DOMESTIC ABUSE.— 8 ‘‘(i) IN GENERAL.—Any eligible dis- 9 tribution to a domestic abuse victim. 10 ‘‘(ii) LIMITATION.—The aggregate 11 amount which may be treated as an eligi- 12 ble distribution to a domestic abuse victim 13 by any individual shall not exceed an 14 amount equal to the lesser of— 15 ‘‘(I) $10,000, or 16 ‘‘(II) 50 percent of the present 17 value of the nonforfeitable accrued 18 benefit of the employee under the 19 plan. 20 ‘‘(iii) ELIGIBLE DISTRIBUTION TO A 21 DOMESTIC ABUSE VICTIM.—For purposes 22 of this subparagraph— 23 ‘‘(I) IN GENERAL.—A distribu- 24 tion shall be treated as an eligible dis- 25 tribution to a domestic abuse victim if 26 VerDate Sep 11 2014 20:35 Jun 09, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H2953.IH H2953 pamtmann on DSKBC07HB2PROD with BILLS 3 •HR 2953 IH such distribution is from an applicable 1 eligible retirement plan to an indi- 2 vidual and made during the 1-year pe- 3 riod beginning on the date on which 4 the individual is a victim of domestic 5 abuse by a spouse or domestic part- 6 ner. 7 ‘‘(II) DOMESTIC ABUSE.—The 8 term ‘domestic abuse’ means physical, 9 psychological, sexual, emotional, or 10 economic abuse, including efforts to 11 control, isolate, humiliate, or intimi- 12 date the victim, or to undermine the 13 victim’s ability to reason independ- 14 ently, including by means of abuse of 15 the victim’s child or another family 16 member living in the household. 17 ‘‘(iv) AMOUNT DISTRIBUTED MAY BE 18 REPAID.— 19 ‘‘(I) IN GENERAL.—Any indi- 20 vidual who receives a distribution de- 21 scribed in clause (i) may, at any time 22 during the 3-year period beginning on 23 the day after the date on which such 24 distribution was received, make one or 25 VerDate Sep 11 2014 20:35 Jun 09, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H2953.IH H2953 pamtmann on DSKBC07HB2PROD with BILLS 4 •HR 2953 IH more contributions in an aggregate 1 amount not to exceed the amount of 2 such distribution to an applicable eli- 3 gible retirement plan of which such 4 individual is a beneficiary and to 5 which a rollover contribution of such 6 distribution could be made under sec- 7 tion 402(c), 403(a)(4), 403(b)(8), 8 408(d)(3), or 457(e)(16), as the case 9 may be. 10 ‘‘(II) LIMITATION ON CONTRIBU- 11 TIONS TO APPLICABLE ELIGIBLE RE- 12 TIREMENT PLANS OTHER THAN 13 IRAs.—The aggregate amount of con- 14 tributions made by an individual 15 under subclause (I) to any applicable 16 eligible retirement plan which is not 17 an individual retirement plan shall not 18 exceed the aggregate amount of eligi- 19 ble distributions to a domestic abuse 20 victim which are made from such plan 21 to such individual. Subclause (I) shall 22 not apply to contributions to any ap- 23 plicable eligible retirement plan which 24 is not an individual retirement plan 25 VerDate Sep 11 2014 20:35 Jun 09, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H2953.IH H2953 pamtmann on DSKBC07HB2PROD with BILLS 5 •HR 2953 IH unless the individual is eligible to 1 make contributions (other than those 2 described in subclause (I)) to such ap- 3 plicable eligible retirement plan. 4 ‘‘(III) TREATMENT OF REPAY- 5 MENTS OF DISTRIBUTIONS FROM AP- 6 PLICABLE ELIGIBLE RETIREMENT 7 PLANS OTHER THAN IRAS.—If a con- 8 tribution is made under subclause (I) 9 with respect to an eligible distribution 10 to a domestic abuse victim from an 11 applicable eligible retirement plan 12 other than an individual retirement 13 plan, then the taxpayer shall, to the 14 extent of the amount of the contribu- 15 tion, be treated as having received 16 such distribution in an eligible rollover 17 distribution (as defined in section 18 402(c)(4)) and as having transferred 19 the amount to the applicable eligible 20 retirement plan in a direct trustee to 21 trustee transfer within 60 days of the 22 distribution. 23 ‘‘(IV) TREATMENT OF REPAY- 24 MENTS FOR DISTRIBUTIONS FROM 25 VerDate Sep 11 2014 20:35 Jun 09, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H2953.IH H2953 pamtmann on DSKBC07HB2PROD with BILLS 6 •HR 2953 IH IRAS.—If a contribution is made 1 under subclause (I) with respect to an 2 eligible distribution to a domestic 3 abuse victim from an individual retire- 4 ment plan, then, to the extent of the 5 amount of the contribution, such dis- 6 tribution shall be treated as a dis- 7 tribution described in section 8 408(d)(3) and as having been trans- 9 ferred to the applicable eligible retire- 10 ment plan in a direct trustee to trust- 11 ee transfer within 60 days of the dis- 12 tribution. 13 ‘‘(v) DEFINITION AND SPECIAL 14 RULE.—For purposes of this subpara- 15 graph: 16 ‘‘(I) APPLICABLE ELIGIBLE RE- 17 TIREMENT PLAN.—The term ‘applica- 18 ble eligible retirement plan’ means an 19 eligible retirement plan (as defined in 20 section 402(c)(8)(B)) other than a de- 21 fined benefit plan. 22 ‘‘(II) DISTRIBUTIONS TREATED 23 AS MEETING PLAN DISTRIBUTION RE- 24 QUIREMENTS; SELF-CERTIFICATION.— 25 VerDate Sep 11 2014 20:35 Jun 09, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H2953.IH H2953 pamtmann on DSKBC07HB2PROD with BILLS 7 •HR 2953 IH Any distribution which the employee 1 or participant certifies as being an eli- 2 gible distribution to a domestic abuse 3 victim shall be treated as meeting the 4 requirements of sections 5 401(k)(2)(B)(i), 403(b)(7)(A)(ii), 6 403(b)(11), and 457(d)(1)(A).’’. 7 (b) EFFECTIVE DATE.—The amendments made by 8 this section shall apply to distributions made after the 9 date of the enactment of this Act. 10 Æ VerDate Sep 11 2014 20:35 Jun 09, 2021 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6301 E:\BILLS\H2953.IH H2953 pamtmann on DSKBC07HB2PROD with BILLS