Does Still Working Excep apply to funds rolled in from IRA
When an employer terminates a qualified plan (401-k) and participant takes the distribution as an IRA rollover and subsequently rolls that IRA into a new qualified plan (401-k) by the employer after ownership changes can the participant take advantage of the Still Working Excemption to defer RMD’s from the 401-k on the monies rolled through the IRA conduit?
Permalink Submitted by Alan Spross on Thu, 2008-08-28 01:35
Yes. This will work for a 401k, but not for a 457 plan. Of course, the new employer plan must allow the still working exception, as they are not required to. This should be checked out before rolling the funds back to the new 401k plan.