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Code · BILL · 118th Congress · S. 3102 (Introduced in Senate) — To establish the American Worker Retirement Plan, improve the financial security of working Americans by facilitating... · Sec. 106

Sec. 106. Distributions

1,379 words·~6 min read·/bill/118/s/3102/is/section-106·

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A former participant is entitled to access the amounts in the former participant’s account as provided in this section. Amounts in the account of a former participant shall remain in the Fund until distributed in accordance with subsection (b). Subject to section 109, a former participant is entitled to and may elect to withdraw from the Fund the balance of the former participant’s account as— an annuity; a single payment; 2 or more substantially equal payments to be made not less frequently than annually; or any combination of payments described in paragraphs
(1)through
(3)as the Executive Director may prescribe by regulation. In addition to the right provided under subsection
(b)to withdraw the balance of the account, a former participant may make 1 or more withdrawals of any amount in the same manner as a single payment is made in accordance with subsection (b)(2) from the former participant’s account. A former participant may request that the amount withdrawn from the Fund under paragraph
(1)be transferred to an existing retirement plan. The Executive Director shall make each transfer directly to an existing retirement plan identified by the former participant for whom the transfer is made. A transfer shall not be made under the preceding sentence until the Executive Director receives from the former participant the information required by the Executive Director specifically to identify the existing retirement plan to which the transfer is to be made. Withdrawals under this subsection shall be subject to such other limitations or conditions as the Executive Director may prescribe by regulation. The Board shall prescribe methods of payment of annuities under this Act substantially similar to those provided for under section 8434 of title 5, United States Code. Subject to section 109, a former participant may change an election previously made under this section, except that in the case of an election to receive an annuity, a former participant may not change an election under this section on or after the date on which an annuity contract is purchased to provide for the annuity elected by the former participant. A former participant may not return a distribution once made pursuant to an election under this section. If a participant or a former participant dies without having made an election under subsection
(b)or after having elected an annuity under subsection
(b)but before making an election for payments to a survivor rights under section 8434 of title 5, United States Code, an amount equal to the value of that individual’s account (as of death) shall, subject to any decree, order, or agreement referred to in section 109, be paid in a manner consistent with the requirements of section 109. Notwithstanding section 109, if a participant or former participant dies and has designated as sole or partial beneficiary the spouse of the participant or former participant at the time of death, or, if a participant or former participant dies with no designated beneficiary and is survived by a spouse, the spouse may maintain the portion of the participant or former participant’s account to which the spouse is entitled in accordance with the following terms: Subject to the limitations of subparagraph (B), the spouse shall have the same withdrawal options under subsection
(b)as a former participant. The spouse may not make withdrawals under subsection
(h)or (i). The spouse may not make contributions or transfers to the account. The account shall be disbursed upon the death of the surviving spouse of the participant or former participant and shall not be maintained by a beneficiary or surviving spouse of the surviving spouse who inherited the account. The Executive Director shall prescribe regulations to carry out this subsection. Notwithstanding subsection (b), if a former participant’s account balance is less than an amount that the Executive Director prescribes by regulation, the Executive Director shall pay the nonforfeitable account balance to the participant in a single payment. The Executive Director may prescribe more than 1 balance amount for payment under this subsection based on age of the former participant. A participant or former participant may apply to the Board for permission to borrow from the participant or former participant’s account an amount not exceeding the value of that portion of such account which is attributable to contributions made by the participant or former participant. Before a loan is issued, the Executive Director shall provide to the participant or former participant in writing with appropriate information concerning the cost of the loan relative to other sources of financing, as well as the lifetime cost of the loan, including the difference in interest rates between the funds offered by the Fund and any other effect of such loan on the participant or former participant’s final account balance. Loans under this subsection shall be available to all participant and former participants on a reasonably equivalent basis, and shall be subject to such other conditions as the Board may prescribe by regulation, which shall be as equivalent as practically possible to those provided for under the Thrift Savings Plan. The restrictions of section 206(c)(1) shall not apply to loans made under this subsection. A loan may not be made under this subsection to the extent that the loan would be treated as a taxable distribution under section 72(p) of the Internal Revenue Code of 1986. A loan may not be made under this subsection unless the requirements of section 109 are satisfied. A participant may apply, before becoming a former participant, to the Board for permission to withdraw an amount from the participant’s account based upon— the participant having attained age 59 1/2 ; or financial hardship. A withdrawal under paragraph (1)(B) shall be available only for an amount not exceeding the value of that portion of such account which is attributable to contributions made by the participant. Withdrawals under paragraph
(1)shall be subject to such other limitations or conditions as the Executive Director may prescribe by regulation, which shall be as equivalent as practically possible to those provided for under the Thrift Savings Plan. A withdrawal may not be made under this subsection unless the requirements of section 109 are satisfied. A participant shall receive a distribution from the Fund if the participant’s gross income for a taxable year exceeds the dollar threshold (as adjusted by the Secretary of the Treasury) established under section 414(q)(1)(B) of the Internal Revenue Code of 1986. The amount of a distribution under paragraph
(1)shall be equal to the sum of such participant’s contributions to the Fund for the taxable year for which such distribution is required under paragraph (1), increased by any gains attributable to such contributions, and decreased by any losses attributable to such contributions, any early withdrawal penalties, and any expenses associated with making such distribution. The Executive Director shall provide notice to a participant subject to a distribution under paragraph
(1)not later than 7 days after the Executive Director determines that such participant is subject to such distribution, based on information regarding participants' gross income provided by the Secretary of the Treasury. Not later than 30 days after receiving notice under subparagraph (A), a participant may elect to direct that a distribution under paragraph
(1)be made— in the case of an eligible rollover distribution (as defined in section 402(c) of the Internal Revenue Code of 1986), to an eligible retirement plan (as defined in such section of such code); or directly to such participant. In the case of a participant who fails to make an election within the period described in subparagraph (B), the Executive Director shall make the distribution directly to such participant. A distribution made under paragraph
(1)directly to the participant under subparagraph (B)(ii) or
(C)shall be treated as an early distribution from a qualified retirement plan pursuant to section 72(t) of the Internal Revenue Code of 1986 to the extent such distribution does not consist of participant contributions to the Fund. The rules of sections 408(d) and 408A(d) of the Internal Revenue Code of 1986 shall apply to distributions from the Fund in the same manner as if such Fund were a Roth IRA. For purposes of the preceding sentence, contributions made under section 25F of such Code shall be treated as employer contributions which were not includible in gross income.
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