Rollover to 401(k) in 1998?
A client’s deceased spouse changed employment in 1998. He rolled a lump sum from previous ‘ERs QRP into Banker’s Trust Co. We have no record of an IRA. Was it possible, in 1998 to roll a QRP balance into a new employer’s 401(k)?
Permalink Submitted by Alan Spross on Fri, 2008-01-18 23:45
Al,
I think so – attached is explanation of portability pre EGTRRA, which was passed in 2001, and I cannot recall any portability changes between 98 and 01:
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Distributions from Qualified Plans
Under pre-EGTRRA law, an “eligible rollover distribution” from a tax-qualified Internal Revenue Code (Code) Section 401(a) employer-sponsored retirement plan could be rolled over, tax free, to a traditional IRA or another Code Section 401(a) qualified plan. (The term traditional IRA refers to an IRA other than a Roth IRA or a SIMPLE IRA.) An eligible rollover distribution was any distribution to an employee of all or any portion of the balance to the credit of the employee in a qualified plan, except that it did not include (1) any distribution that was one of a series of substantially equal periodic payments made (a) for the life (or life expectancy) of the employee or the joint lives (or joint life expectancies) of the employee and the employee’s designated beneficiary or (b) for a specified period of 10 or more years, (2) any distribution to the extent such distribution was required under Code Section 401(a)(9)’s minimum distribution rules, or (3) certain hardship distributions. The maximum amount that could be rolled over was the amount of the distribution includible in income; that is, after-tax employee contributions could not be rolled over. Qualified plans were not required to accept rollovers. [Joint Committee on Taxation Summary of Provisions Contained In the Conference Agreement for H.R. 1836, The Economic Growth and Tax Relief Reconciliation Act of 2001 (JCX-50-01), May
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Permalink Submitted by Denise Appleby on Sat, 2008-01-19 16:11
Alan is right. It was permissible in 1998.
If you are doing a search by TIN, it is possible the number was mistyped into the system. I have seen a few cases where that occurred- and searching by a short name sometimes does not help, if the shortname data entry is free-formatted. But then, the statement would have been going to the right address- hopefully. Did the client change address since 1998? Maybe the statements are going to an old address.
The previous employer may still have records of how they processed the distribution.