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Frelinghuysen and Bachus Call on the Senate to Provide Relief for Older Americans

Rep. Rodney Frelinghuysen (NJ-11) and Rep. Spencer Bachus (AL-6) today called on the Senate to support House passed legislation suspending mandatory IRA and 401(k) withdrawal requirements for 2009. The provision was included in H.R. 7327, passed by the House on Thursday.

“This legislation is a strong step forward in our effort to ease the burden on older Americans struggling through our nation’s financial crisis,” said Frelinghuysen. “I urge the Senate to adopt this common sense proposal and provide relief to our nation’s retirees. While last night’s House Action does not provide the immediate relief we originally sought, it still represents progress for older Americans.”

“Federal tax law should not force seniors to take money from their retirement accounts at a time when the value of their investments has plummeted,” said Bachus.

In November, Representatives Frelinghuysen and Bachus introduced H.R. 7277, the Temporary IRA Distribution Suspension Act, which would suspend mandatory withdrawal requirements for both 2008 and 2009. The legislation received broad support in Congress and from groups such as the American Association of Retired Persons (AARP). However, the proposal approved in the House last night only suspends mandatory withdrawal requirements in 2009.

The House passed legislation lifts the Internal Revenue Service requirement that forces Americans 70 and ½ or older withdraw funds from their Individual Retirement Accounts (IRAs) and 401(k). Under this legislation, a person may still choose to withdraw from their accounts but will not be required to make a minimum withdrawal in 2009.

This week, Representatives Frelinghuysen and Bachus, along with 24 colleagues, sent a letter to House Speaker Nancy Pelosi urging the suspension of withdrawal requirements. In October, Frelinghuysen contacted the Treasury Department to seek administrative relief for seniors.

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