New Roth 401(k) Rollover Legislation Introduced

Reps. Darin LaHood (R-Ill.) and Linda Sánchez (D-Calif.) introduced a bill on Dec. 13 that would allow retirement savers to roll over their Roth IRA savings into a Roth workplace retirement plan such as a Roth 401(k), Roth 403(b), or Roth 457(b).

The bipartisan bill, which the American Retirement Association (ARA) supports, notes that workers are currently prohibited from rolling their Roth IRA savings into workplace-based Roth retirement plans, something the bill would address.

"Building retirement security is critical to the longevity and strength of our economy," Rep. LaHood said in a statement. "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."

“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,” Rep. Sánchez added. “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.”

This bill builds off 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.

“We applaud Reps. LaHood and Sanchez for introducing this sensible proposal,” ARA CEO Brian Graff said of the Roth rollover bill. “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. These changes will be even more important as state auto-IRA programs grow.”