Penalty-free withdrawals from retirement plans for military reservists

January 17, 2007

A number of pension-related provisions, including one that would make permanent the expiring provision that permits active duty reservists to make penalty-free withdrawals from private retirement plans and IRAs, were included in H.R. 3997, a package of tax benefits for military personnel, veterans and firefighters. The bill unanimously passed the House on December 18, 2007 and the Senate passed the House bill the following day. A conference to reconcile differences in the bills is anticipated early this year. The specific provision was originally in the PPA but was due to expire. It would not impact governmental retirement plans but would be applicable to IRAs.