401k to IRA rollover….was it a mistake?
50 year old who is the employer / participant changed 401k plan to a new 401 provider / trustee.
He rolled his 401k to his IRA. Plan document had no in service distriution language. Can the change of plans qualify for a rollover?
If no, should the rollover go back to the new 401k plan? I guess also a 5293 would need to be filed?
Permalink Submitted by Alan - IRA critic on Sat, 2014-05-31 15:58
The rollover likely was not permissible since the plan itself did not change. The amount of the rollover should probably be rolled back into the plan to show good faith in correcting the violation after some research. No need for a 5329 since an early withdrawal penalty would not be applicable. Worst case would be some other sort of penalty under EPCRS self correction guidelines for plan violations. The new administrator may be able to provide some guidance on what the corrective procedure should be for this type violation.