PPA non-spouse rollover… down to the wire
Well, checking my inherited IRA account, the 401k rollover showed up around 8:00pm est. Nothing like cutting it close.
This was a non-spouse rollover of an inherited 401K. The decedent’s death was in 2006, so the rollover had to be done by 12/31/07. This the third part of the trilogy consisting of an IRA, 403b, and 401K. The IRA was easy, the 403b is a work in progress, and this the saga of the 401k.
With help from this board and others I have been trying to get the rollover done since January. It has been a trying exercise of educating, monitoring, cajoling, and finally threatening. I can’t begin to tell you the dozens of times I emailed, telephoned, and wrote letters to this company. Which resulted in a promise to change the plan to allow non-spouse rollovers effective 1/1/07.
Promise after broken promise, excuses of vacations/business trips of board members, signatures required of company officers, and finally the ultimate obstacle (notification on 12/5/07 that the document specified an effective date of 1/1/08 ).
Through information graciously provided here, assistance of my lawyer, and most importantly through the whole process… the tremendous support of the benefits administrator of this company, the MRD and rollover have been accomplished in 2007.
Let this be a lesson for people with similar problems. Ultimately it was my champion at the company who pushed this thru at the last moment. Even when confonted with terrible news (12/5/07), I did not shoot the messenger. She was my greatest asset.
Permalink Submitted by Alan Spross on Tue, 2008-01-01 05:57
It’s good to hear stories like this to appreciate the hurdles it takes to accomplish what should be routine transactions, so thanks for posting this. Glad it turned out OK in the end. Happy New Year!
Permalink Submitted by William Tuttle on Tue, 2008-01-01 18:19
Thanks,
This shows why the IRS should never have made this optional. Why should the action or in this case the inaction of a company have adverse effects on an individual. Since this plan only allowed the five year rule, this could have had significant adverse tax consequeces. This has the effect of allowing plans to be discriminatory.
P.S. My other plan the 403b ultimately refused to allow non-spouse rollovers. Luckily they did have allowances for life expectancy distributions (which I started in 2007). That coupled with the IRS making rollovers mandatory effective 1/1/08, should allow me to be ok (famous last words).
Permalink Submitted by Al Fry on Tue, 2008-01-01 19:49
Not that I (nor anyone) should defend the IRS, however I believe they were merely trying to interpret the law. Then they anticipated TCA 2007 making in mandatory, so they jumped the gun (thankfully) and made it mandatory. There was a TCA 2007 passed in December, however mostly just correcting clerical errors. There is another TCA pending that did not get passed, however may yet make it this month. Hopefully it will be in that TCA, in addition possibly expanding the option to spouses, as well.