It has taken nearly five years, but a Clemmons financial advisor’s idea to alter language on the federal IRA accounts was adopted by the U.S. House of Representatives last week.

Shepherded through by U.S. Rep. Virginia Foxx, the bill streamlines SIMPLE IRA rollovers. Paul Johnson of Clemmons first brought it to her attention. Johnson said the process had given him some indication about how cumbersome the law making process can be. “In some ways, I am glad bills take a while to get passed. I think my clients are going to be pleased that Congresswoman Foxx managed to get this bill passed. I faxed Senators Burr and Tillis last week, asking them to support the Senate version that included my bill,” he said.

With rare bipartisan support, the legislation corrects a technical limitation preventing the rollover of tax-deferred retirement funds into existing SIMPLE IRA accounts.

“When I received an email from Congresswoman Foxx’ policy advisor I was excited that my small idea for a bill was passed this month,” said Johnson “One of the best retirement plans for small businesses is the SIMPLE IRA. Owners can offer employees a way to save for retirement without all those fees in 401(k)’s. My clients were frustrated when they could not roll their other retirement savings into their SIMPLE IRA and have just one account. I wondered if Congress could reverse the prohibition on employees to consolidate of other accounts into the SIMPLE IRA. My respect for Congresswoman Foxx led me to reach out to her.

“Five years ago, after her re-election in 2010, I sent a fax asking for a change in the law so that clients could consolidate. She met with me and replied that she would work on it. She and her staff spent over 35 hours researching the ERISA regulations, the history of the bill and wrote it. She had to get acceptance that it was “revenue neutral” and find a Democrat as a co-sponsor.

She told me that she went to a Democrat from Massachusetts and asked for his co-sponsorship by saying “I have a constituent who says this is important for his clients and I imagine there are advisors in your district with the same concerns.” That’s all a lot of work! “Congresswoman Foxx stayed with it when it couldn’t get the light of day in the term of 2011 and 2012. I attempted to enlist help from my professional organization, NAIFA [National Association of Insurance and Financial Advisors], but it was Foxx’ work that led to the co-sponsor. I’ve been so happy for her work during the next five years. She kept her staff on it and even had to find a new co-sponsor when the previous one lost his re-election. She got the bill re-written two more times. She and her policy advisor stayed in touch with me over these five years.

“I know that many of my clients will be happy to roll their other retirement accounts into the SIMPLE IRA instead of just having a Rollover IRA. The language is part of the Protecting Americans from Tax Hikes Act, which provides permanent tax relief for American families, college students, charities, small businesses and enterprises on the forefront of innovation. “Individuals should be able to consolidate their retirement funds in a way that best meets their needs, and I’m pleased this legislation includes language that will simplify retirement planning and ensure a complex tax code does not prevent sensible financial planning decisions,” said Foxx.

“This legislation is an important first step on the long road to ensuring our tax system works for Americans, not against them.” SIMPLE IRAs face a 25 percent early withdrawal penalty during the first two years of their existence compared to 10 percent for other IRAs. In order to prevent account holders from unknowingly rolling their IRA funds into SIMPLE IRAs and being surprised by an increased early withdrawal penalty, current law prohibits rolling funds over into a SIMPLE IRA from other retirement accounts.

However, SIMPLE IRAs have the same early withdrawal penalty as other IRAs after that initial two-year period, and consumers and financial planners have struggled with the rollover restrictions as they attempt to consolidate accounts. Foxx’s language allows for rollovers into SIMPLE IRA accounts that have met the two-year threshold. By making a number of temporary tax provisions permanent, the Protecting Americans from Tax Hikes Act delivers certainty to American taxpayers and makes it easier for employers to plan ahead, hire new workers, grow their businesses and invest in their communities.