NYS Partial Lump Sum payment / IRA
If someone takes a Partial Lump Sum payment ( From The NYS Pension System) and puts the PLSP in an IRA, and then gets a Disability Pension although they have to pay back the PLS can the money remain in an IRA?
If someone takes a Partial Lump Sum payment ( From The NYS Pension System) and puts the PLSP in an IRA, and then gets a Disability Pension although they have to pay back the PLS can the money remain in an IRA?
Permalink Submitted by Alan - IRA critic on Wed, 2018-06-20 19:19
If the direct rollover to the IRA is deemed not to be rollover eligible and the Pension system corrects the 1099R that reported that direct rollover, the IRA contribution will be an excess contribution and have to be removed with allocated earnings. But if the 1099R is never corrected, then the repayment can probably be made with other funds if the person can produce those funds. The Pension System may not address where the repayment comes from. How much time passed between the direct rollover and the effective date of the disability pension?
Permalink Submitted by Larry Zavadoff on Wed, 2018-06-20 19:35
Approx 3yrs
Permalink Submitted by Peter Thomann on Thu, 2018-06-21 12:56
Does NYS allow the retiree to pay the PLSP back via reduced pension for x number of months? Might be worth asking. I know some NYC Pension systems will temporary reduce a retiree’s pension to pay back the cost of a pension option.
Permalink Submitted by Larry Zavadoff on Wed, 2018-06-27 15:05
Yes he does have the option to pay back via a reduced pension.