TCA to PPA 2006
Does anyone know what this means?
“The PPA included a provision providing for qualified plan rollovers of benefits of nonspousal beneficiaries. The technical corrections bill would add inherited IRAs to the types of plans from which such rollovers may be made.”
Permalink Submitted by Jason C on Tue, 2007-08-14 20:08
Hey,
I believe it’s referring to the changing text requiring rollovers to be permitted instead of just allowing for it to be done. As it stands now, an employer does not have to allow it.
This will be a welcome change, however I continue to worry about any deaths prior to 2006 being able to take part in this new law.
Permalink Submitted by Alan Spross on Tue, 2007-08-14 21:13
Sec 829 of the PPA allows these transfers from “eligible retirement plans, govt 457 and 403b”. Under Sec 4974, an IRA is NOT included in the definition of eligible retirement plans. Therefore, in order to avoid the suggestion that inherited IRAs could no longer be transferred, the technical correction was needed. If this presumption is correct, then this correction only technical with no functional change intended.
With respect to pre 2006 owner deaths, I have not heard of any new proposals to allow relief from IRS Notice 2007-7. Even though the IRS is still focused on PPA integration, relief from the notice may have to come from Congress, or at least start there.