II 117TH CONGRESS 1ST SESSION S. 1889 To amend the Internal Revenue Code of 1986 to establish an exception to the penalty on early distributions from qualified plans for individuals diagnosed with certain terminal illnesses. IN THE SENATE OF THE UNITED STATES MAY 27, 2021 Mr. BURR (for himself and Mr. BENNET) introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To amend the Internal Revenue Code of 1986 to establish an exception to the penalty on early distributions from qualified plans for individuals diagnosed with certain ter- minal illnesses. 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 ‘‘Kathryn Manginelli 4 Act of 2021’’ or the ‘‘Compassionate Retirement Act of 5 2021’’. 6 VerDate Sep 11 2014 23:49 Jun 15, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S1889.IS S1889 kjohnson on DSK79L0C42PROD with BILLS 2 •S 1889 IS SEC. 2. EXCEPTION TO PENALTY ON EARLY DISTRIBUTIONS 1 FROM QUALIFIED PLANS FOR INDIVIDUALS 2 WITH A TERMINAL ILLNESS. 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) TERMINAL ILLNESS.— 7 ‘‘(i) IN GENERAL.—Distributions 8 which are made to the employee who is a 9 terminally ill individual on or after the 10 date on which such employee has been cer- 11 tified by a physician as having a terminal 12 illness. 13 ‘‘(ii) DEFINITION.—For purposes of 14 this subparagraph, the term ‘terminally ill 15 individual’ has the same meaning given 16 such term under section 101(g)(4)(A), ex- 17 cept that ‘84 months’ shall be substituted 18 for ‘24 months’. 19 ‘‘(iii) DOCUMENTATION.—For pur- 20 poses of this subparagraph, an employee 21 shall not be considered to be a terminally 22 ill individual unless such employee fur- 23 nishes sufficient evidence in such form and 24 manner as the Secretary may require.’’. 25 VerDate Sep 11 2014 23:49 Jun 15, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S1889.IS S1889 kjohnson on DSK79L0C42PROD with BILLS 3 •S 1889 IS (b) EFFECTIVE DATE.—The amendment made by 1 this section shall apply to distributions after the date of 2 the enactment of this Act. 3 Æ VerDate Sep 11 2014 23:49 Jun 15, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6301 E:\BILLS\S1889.IS S1889 kjohnson on DSK79L0C42PROD with BILLS