Defined Benefit to IRA Rollover
DB owner, 57, due to retire in May 2018
Participant would like to convert his accrued benefit to a lump sum and do a partial IRA rollover – remaining funds distributed in cash
Question:
Must the plan allow a “split” distribution?
Does the portion of the cash distribution (e.g. not rolled to an IRA) qualify for the “age 55” exception (to the 10% penalty). I would think so – looking for confirmation.
thank you
Permalink Submitted by Alan - IRA critic on Fri, 2018-02-16 19:04
Yes, the distribution options are determined by the plan provisions, but all allowed distributions qualify for the age 55 separation exception.