plan administrator wont allow rollover to a roth
what if a plan administrator will not allow a direct rollover from a 401(k) to a Roth IRA? Are the new regs mandatory that a plan have to allow this?
what if a plan administrator will not allow a direct rollover from a 401(k) to a Roth IRA? Are the new regs mandatory that a plan have to allow this?
Permalink Submitted by Al Fry on Thu, 2008-05-22 17:38
Just roll it to a traditional, then convert to a Roth, unless there is a valid reason not to.
Permalink Submitted by Brent Steiner on Thu, 2008-05-22 18:02
I realize that I can roll to a traditional – then convert to the Roth – my frustration is when a plan administrator tells me that it cannot be done – also this rollover is so small – I hate to have to open the trad IRA, process the conversion forms and end up in our current Roth account if this can all be streamlined from the outset
Permalink Submitted by Alan Spross on Thu, 2008-05-22 20:47
It appears to be mandatory per attached copied from Notice 2008-30. That said, there are various elements of this transfer that the IRS has not yet adequately clarified.
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Q-4. Under § 401(a)(31)(A), must a plan permit a distributee of an eligible
rollover distribution to elect a direct rollover to a Roth IRA?
A-4. Yes. Section 401(a)(31) requires that a plan follow a distributee’s election
to have an eligible rollover distribution paid in a direct rollover to an eligible retirement
plan specified by the distributee. Section 1.401(a)(31)-1 of the Income Tax Regulations
provides rules for direct rollovers, including exceptions for small amounts and multiple
distributions.
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