Hill technical tax staffers say Congress may act on a “small ball” tax bill during the post-election lame duck session. The bill would be comprised of bipartisan, fairly narrow proposals that have wide support. Among the proposals that could be included in the bill is the LaHood-Panetta bill that would clarify and simplify the notices given to plan participants who are separating from service and would allow partial annuitization of plan funds while a participant continues to work.

Hill staff and Members alike caution that action on this narrow bill—which could also address international tax issues and some unintended consequences of last year’s spending and tax cuts law—is and will continue to be sensitive to what happens with the current GOP effort to do another Republican-only reconciliation bill. If a reconciliation bill is still pending, and/or if political rancor gets even more intense, chances for a bipartisan bill go way down, Hill folks say.

NAIFA supports the LaHood-Panetta bill, H.R.6324. It calls for more clarity and simplification of the notice that goes to plan participants who are retiring or leaving an employer. The notice lays out plan participants’ options about what to do with their retirement money once they are separated from service. The bill also authorizes in-service rollovers to retirement annuities after age 50.

Prospects: At this juncture, a small bipartisan tax bill appears possible, but something of a long shot. Its prospects will depend on election results, the success or failure of the GOP effort to do another reconciliation bill that contains a tax title, and competition from other must-pass legislation (e.g., government funding bills) that must still be done in November/December.

NAIFA Staff Contacts: Jayne Fitzgerald – Director – Government Relations, at jfitzgerald@naifa.org