WASHINGTON, D.C. – Today, U.S. Senators John Barrasso (R-Wyo.) and Michael Bennet (D-Colo.), both members of the Senate Finance Committee, introduced the Retirement Rollover Flexibility Act. The bipartisan, bicameral legislation gives working Americans new flexibility to transfer their Roth retirement accounts when changing jobs, helping them consolidate their savings and reduce duplicative fees.

Current law prohibits workers from rolling over Roth Individual Retirement Accounts (IRAs) into employer-sponsored plans. This restriction forces many Americans to maintain multiple small retirement accounts, resulting in unnecessary expenses and, in many cases, leading workers to cash out their savings early and lose critical retirement funds.

“Retirement savings belong to the workers who earn them, and those savings should follow them throughout their careers,” said Senator Barrasso. “The Retirement Rollover Flexibility Act creates new options for workers to bring retirement savings with them when changing jobs. This commonsense reform will strengthen retirement security and help Wyoming families build stronger financial futures.”

“Workers shouldn’t lose track of their retirement savings just because they change jobs,” said Senator Bennet. “Right now, outdated rules prevent Roth retirement accounts from moving with workers the way traditional accounts can. This bill fixes that gap—ensuring all workers can consolidate their retirement savings, reduce fees, and keep their nest egg growing no matter where their career takes them.”

Representatives Darin LaHood (R-Ill.) and Linda Sánchez (D-Calif.) introduced companion legislation in the U.S. House of Representatives.

“Building retirement security is critical to the wellbeing of American families and the long-term strength of our economy,” said Congressman LaHood. “Our bipartisan bill will allow for the consolidation of assets, reduce duplicative fees, simplify retirement savings, and help families across the country better plan for their future. Congress must continue to remove unnecessary barriers and find solutions that help American workers build for a comfortable retirement. I am proud to join my Ways and Means colleague, Representative Sanchez, and Senators Barrasso and Bennet on this commonsense legislation.”

“Millions of Americans rely on Roth IRAs to help prepare for retirement. As more people use these accounts, we need to make it easier for workers to move their savings into the Roth options offered through their jobs,” said Congresswoman Sánchez. “I’m grateful to work with Congressman LaHood and Senators Barrasso and Bennet on this bipartisan, bicameral effort to give people a simple way to roll over their savings to build a stronger foundation for retirement.”

“With the rapid expansion of state auto-IRA programs—nearly all of which default savers into Roth IRAs—and with Americans changing jobs more often than ever, the need for true retirement savings portability has never been greater,” said Brian Graff, CEO of the American Retirement Association. “Allowing workers to move their Roth IRA balances into designated Roth accounts within employer-sponsored retirement plans is a smart, timely, and sensible solution. The Retirement Rollover Flexibility Act will reduce duplicative fees associated with maintaining multiple accounts, curb retirement savings leakage through seamless auto-portability, and ensure workers can carry their Roth savings with them as they move through their careers. The American Retirement Association applauds Senators Barrasso and Bennet and Representatives LaHood and Sánchez for their leadership on this critical issue.”

Background:

The Retirement Rollover Flexibility Act:

• Allows workers to transfer (or “roll over”) Roth IRA balances into employer-sponsored retirement plans when starting a new job.
• Creates parity with traditional IRAs, which already have this rollover flexibility.
• Preserves the tax-advantaged treatment of these rollovers and coordinates with existing distribution rules for designated Roth accounts.

Workplace Roth plans are widely used in Wyoming, with private-sector employees utilizing Roth 401(k)s, nonprofit employees using Roth 403(b)s, and state employees, teachers, and first responders participating in the Wyoming Retirement System’s Roth 457(b) plan.

By removing barriers to Roth rollovers, this legislation will help these workers keep their retirement savings intact as they build their careers. This flexibility ensures that Americans can build retirement security without losing savings to unnecessary fees or early cashouts.

Full text of the legislation can be found here.

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