415(m) Governmental Retirement Arrangement rollover allowed?
Can I roll over a 415(m) Governmental Retirement Arrangement to a 403b or IRA account?
This account is through the University of Texas system, custodian is TIAA-CREF. The title of the account on the statement is “University of Texas System 415M Governmental Retire. Arrangement”.
Texas benefits office refers us to TIAA-CREF and vice versa. No one knows the rights or how to move the monies. One source said the monies could be rolled over. Another said the monies have to be distributed as W-2 income.
In the Texas plan document, the account is referred to as the UTGRA and the IRS issued a favorable PLR approving the UTGRA as a “qualified governmental excess benefit arrangement.”
Can this account be rolled over to another tax deferred retirement account such as a 403b, ORP, IRA, etc? If yes, what IRS or other publication demonstrates that ability? If not, why?
Thanks for your help.
Permalink Submitted by Alan - IRA critic on Thu, 2013-02-07 00:08
This is what TIIA CREF says about these plans, but no telling how to report a rollover if the plan is going to issue a W-2 instead of a 1099R. You can’t report a direct rollover on a W-2. This is a pretty basic question for the plan itself not to be able to address. It seems like there is not enough of these plans for the IRS to issue general guidance on them, so the only logical solution is to press the plan for this information. http://hrhorizons.nacubo.org/Documents/Fact%20sheet–415m%20excess%20benefit%20plans.pdf
Permalink Submitted by Bro Has on Wed, 2013-02-27 13:56
To close the loop on this issue for the forum. It seems that 415m plans are allowed to be rolled over to a 403b, IRA, etc. See link provided by Alan as an example. However, the University of Texas plan does not allow rollovers. After discussion with the UT benefits person, it sounds like their plan was established at a time when the ability to roll over assets to another retirement account was unclear. Therefore, the UT plan document was written in such a way as to not allow rollovers. After the IRS provided guidance that rollovers of 415m plans are allowed, UT did not update their plan document. It was not clear whether that was intentional (wanted to keep the benefit consistent) or other (benefits group did not want to or realize a change could be made). Since the 415m plan was only available to certain employees, the language is excluded from the plan documents that are publicly availalbe.The participants of the UT plan sign a form when the account is established selecting when the distribution should occur. Several options were available: periodic distributions over 5, 10, 15 years; lump sum (at termination if over 55, at age 65 if terminate before age 55). The options are irrevocable.So, as usual, the company / organization plan rules (published or not) dictate the options available.