One-per-year rule
An individual is transferring funds from a TIAA-Cref 403(b) to an IRA. TIAA-Cref is requiring that this be done over 10 years. They calculate the RMD each year and send a check for any amount in excess of the RMD to the client so he can roll the funds over into an IRA. TIAA-Cref will not do a trustee to trustee transfer for this account. Is this individual in violation of the one rollover per year rule if he rolls the funds into the same IRA within a 365 day period?
Permalink Submitted by Alan - IRA critic on Thu, 2015-12-03 16:13
No violation because the one rollover in a 12 month period only applies to IRA to IRA rollovers. If a non IRA plan is on EITHER end of the transaction, the limitation does not apply. Note that the amount in excess of the RMD is considered eligible for rollover and therefore 20% mandatory federal withholding will be deducted. To complete the rollover the individual will have to add the 20% back from other sources, The mandatory withholding should not be deducted from the RMD portion because that portion is NOT an eligible rollover distribution, but individual could request voluntary withholding in most cases.