401K payouts
1.if a 401K plan does not provide a non spouse beneficiary the option to roll over the 401K into an inherited IRA, does the plan determine whether the funds must be immediate distributed…and taxed….or do IRS regulations require all plans provide the option of an immediate pay out…or withdrawing the funds within five years.
thanks
Permalink Submitted by Alan Spross on Fri, 2007-10-12 01:42
The plan provisions can be more restrictive than the IRS 5 year or life expectancy options, and therefore many of them opt for the immediate lump sum payout. Many plans do not want the continued administrative costs of maintaining the beneficial interest of plan beneficiaries.
Permalink Submitted by Al Fry on Sun, 2007-10-14 20:42
I would think pressure from ‘ees on the ‘er to allow the transfer to an inherited IRA would have some positive results, since there is pending legislation to make it mandatory. They can allow it without amending their plan until 2009.