Converting an IRA to a pension plan?
We have a client who distributed their pension plan to an IRA and are now being told they need to put it back into the pension plan?
Can anyone confirm if this would be true and if so, can you roll an IRA back to a pension plan?
Thanks,
Jamie
Permalink Submitted by BruceM on Sat, 2008-12-06 01:15
I can speak to this generally.
I assume you’re speaking of a Defined Benefit Plan, as opposed to a Money Purchase Plan?
If so, the plan may have erred in distributing the ‘cash value’ of the accrued benefit due to any number of reasons, and so may require the distribution be returned. This is not at all uncommon when PBGC assumes operations of a terminated DBP. There are some real horror storries involving newly retired airline pilots and their former, subsequently bankrupt, employers.
In any event, there should be a formal letter from the plan administrator or employer, describing the details as to why the distribution is being recalled. If the EE is not satisifed, assuming this is a ‘covered’ employer, the EE may contact the PBGC to file a complaint.
BruceM