Are QDRO splits considered a Rollover?
If a client receives half of a 403b and it is automatically split by the plan custodian, is her new account a rollover or is it still eligible for the one rollover in the year?
If a client receives half of a 403b and it is automatically split by the plan custodian, is her new account a rollover or is it still eligible for the one rollover in the year?
Permalink Submitted by Alan - IRA critic on Thu, 2013-12-12 16:04
The one rollover per 12 month limit does NOT apply to rollovers unless an IRA is both the distributing and the receiving account. Therefore, a rollover from a 403b to an IRA does not count with respect to the limit. Note that if the client rolls her 403b plan portion to an IRA the QDRO exception to the early withdrawal penalty will no longer apply, so client may wish to keep the 403b until she reaches 59.5 if not yet there.
Permalink Submitted by Mark Hilgenberg on Thu, 2013-12-12 16:11
How about rolling to another 403b? Does that keep the early withdrawl exception?
Permalink Submitted by Alan - IRA critic on Thu, 2013-12-12 19:36
No. QDROs are plan specific, and the penalty waiver only applies to the plan named on the QDRO. http://www.retirementdictionary.com/definitions/qualifieddomesticrelationsorder