Multiple Rollovers
An Pension in monthly payout over 5 years. Pension considers this a distribution from the plan but will send the check to any special payee. Can I direct that monthly payment into an IRA as a rollover since I technically took receipt of the money (distrib from the pension)? Does this violate the 60 day rollover rules/1x per 12 month period? I know that QP assets direct rolling to an IRA monthly does not violate this rule, but in this case the 1099R reporting may impact the elig. to roll over the assets.
Permalink Submitted by Anonymous (not verified) on Fri, 2009-02-20 18:59
Since the payout is over a period of less than 10 years and also less than your life expectancy (assumed), it should be rollover eligible. This also means that there should be 20% mandatory federal withholding taken out of the distribution. Is there? If not, that is an inconsistency that should be investigated.
If the distributions turn out to be eligible for rollover as suspected, and if withholding is initiated, the net distribution plus the replacement amount for the withholding can be rolled over to an IRA within 60 days. These rollovers do NOT count against the one rollover limit because the funds did not originate from an IRA account.
Is the lack of withholding what you are referring to with respect to the 1099R impacting rollover eligibility?
Permalink Submitted by Anonymous (not verified) on Fri, 2009-02-20 21:49
I assumed since there was constructive receipt of the assets that this would violate the 1x per calendar year rollover. Sounds like if this is coming from a QP plan no matter if it comes to me and then to an IRA or to the IRA directly, it is an elig. rollover and can be done on a monthly bases. Unlike IRAs….