Headlines about "Distributions - rollovers"
Gathered from the web by the editors at BenefitsLink.com.
[Official Guidance] Text of IRS Private Letter Ruling Extending 60-Day Rollover Period Because of Bank Error (PDF)
"Taxpayer A maintained IRA B, a [CD], with Bank C. Upon maturity of the CD ... Taxpayer A initiated a transfer of Amount 1 from IRA B to an account at Bank D. Instead of depositing Amount 1 into a rollover IRA account as Taxpayer A intended, Bank D deposited Amount 1 in Account E, a non-IRA CD.... When the mistake was discovered ... Bank D transferred Amount 3 to ... and IRA CD. Taxpayer A ... believed that Account E was and IRA and that Bank D made a mistake in depositing Amount 1 into a non-IRA CD." [PLR 201319034, dated Feb. 14, 2013, published May 9, 2013] (Internal Revenue Service)
When Rolling Over, Make Sure You Don't Get Squished by Costs
"Investing pros agree that cashing out retirement savings is hardly ever wise. But there are benefits to both of the other alternatives: IRAs typically offer a wider range of investment options, while 401(k) plans offer lower costs, particularly if they are sponsored by a big employer. Those cost savings can be significant in the long run." (The Wall Street Journal)
401(k) Rollover Study Triggers Call for Action to Protect Plan Participants
"One of the biggest steps is updating a 37-year-old fiduciary standard that was developed in a very different marketplace, said Phyllis C. Borzi, assistant secretary of labor for [EBSA]. 'We believe our work regarding the definition of fiduciary is key to addressing conflicted investment advice and related problems your report identifies,' Ms. Borzi said in a letter to the GAO." (Pensions & Investments)
Text of GAO Report: DOL and IRS Could Improve the Rollover Process for Participants
"GAO found that service providers' call center representatives encouraged rolling 401(k) plan savings into an IRA even with only minimal knowledge of a caller's financial situation. Participants may also interpret information about their plans' service providers' retail investment products contained in their plans' educational materials as suggestions to choose those products. Labor's current requirements do not sufficiently assist participants in understanding the financial interests that service providers may have in participants' distribution and investment decisions.... GAO recommends that Labor and IRS should take certain steps to reduce obstacles and disincentives to plan-to-plan rollovers." [Editor's note: The report includes seven specific recommendations for DOL and Treasury actions, including "finalize the agency's initiative to clarify the [ERISA] definition of fiduciary" and "develop a concise written summary explaining a participant's four distribution options and listing key factors a participant should consider when comparing possible investments, and require sponsors to provide that summary."] (U.S. Government Accountability Office)
Making a 'Backdoor' Roth IRA Contribution
"[If] a taxpayer rolls over a distribution from his or her IRA to an eligible retirement plan ... and the amount rolled over equals only the sum of deductible contributions and earnings on all contributions ... but not any nondeductible contributions, the entire amount rolled over will not be taxed at the time of rollover.... The taxpayer's remaining IRA balance after the rollover should equal its basis, so the taxpayer could immediately withdraw that remaining balance tax free or convert it to a Roth IRA tax free." (Journal of Accountancy)
[Guidance Overview] 'Blue Book' Clarifies Distribution Restrictions Following In-Service Roth Conversions
"The 'Blue Book' for [the American Taxpayer Relief Act of 2012], as released by [JCT] in February 2013, clarifies the provisions authorizing in-service rollover distributions of 401(k) funds to Roth 401(k) plans. Significantly, the Blue Book explains that amounts subject to a distribution restriction in a 401(k), 403(b), or 457(b) plan before an in-plan transfer remain subject to the applicable distribution restrictions after the transfer." (Wolters Kluwer Law & Business)
Auto Rollovers: They're Not Just for Crash Test Dummies
"[M]any plans have never adopted an auto rollover provision. Default IRAs are handy because they get the liabilities out of the plan and eliminate the need to keep track of long forgotten, barely vested participants and pay their [PBGC] premiums.... [Many] IRA providers .. accept the auto rollovers ... [at] no cost to the plan sponsor." (Retirement Town Hall)
Annual IRA Rollovers to Surpass $450B by 2017
"Assets in 401(k) plans totaled $3.1 trillion in 2011 ... IRA assets reached nearly $5 trillion by the end of 2011 and rollover contributions were more than $300 billion. Both of these totals will increase over the next five years as Baby Boomers enter retirement." (PLANADVISER.com)
2012 Q&As: Treasury and IRS Meeting with ABA Joint Committee on Employee Benefits, May 11, 2012 (PDF)
Some questions on flexible spending accounts, HSAs and executive benefits, but most of the questions address 401(k) plan operation and distributions from tax-qualified retirement plans. "The statements contained herein cannot be relied on even though they are printed as statements of the IRS. The questions were submitted by ABA members, and the responses were given [orally at a meeeting on May 11, 2012] after explicit statements that their responses reflect the unofficial, individual views of the government participants as of the time of the discussion, and do not necessarily represent agency policy." (American Bar Association)
Advantages and Disadvantages of DC to DB Rollovers
"This Spotlight presents an overview of some of the advantages and disadvantages of DC to DB rollovers, from both the employer's and the employees' perspective. The decision to offer DC to DB rollovers is by no means straightforward, depending on the weight the plan sponsor places on the positive and negative attributes. The Spotlight concludes with an overview of some ambiguities about DC to DB rollovers that employers should be aware of if they are considering offering the option." (Sibson Consulting)
Annuity Buyers Finding Guaranteed Lifetime Benefits Attractive
"Indexed annuities ... rose by 14% in the first quarter ... Guaranteed-lifetime-withdrawal benefits ('GLWB') helped move the product among customers. Two of three people who bought fixed indexed annuities decided to buy a GLWB rider, which lets customers get lifetime income without annuitizing their contracts." (Investment News; free registration required)
[Guidance Overview] A Bridge Too Far: Early Retirement Exception from 10% Tax Was Available from Participant's 401(k), But Not After IRA Rollover
"The court held that the taxpayer would not have been subject to the 10% tax if he had taken the distribution directly from the 401(k) plan upon termination because of the exception in section 72(t)(2)(A)(v) of the Internal Revenue Code for post-separation distributions to an employee who has attained age 55, but because he chose to roll over his balance, the exception no longer applied to a distribution from an IRA." (Haynes and Boone)
Think Twice About Rolling Your 401(k) into an IRA -- Consider Investment Management Fees When You Receive New Disclosure Report
"Before you make a move, compare the fees of your 401(k) plan's funds with any retail funds you're considering at the IRA rollover institution. The new 401(k) fee-disclosure rules that become fully effective in August will make this comparison easier. [The author's] recent post showed average and median fees for various types of mutual funds. You'll want to invest in funds with expenses well below these averages, and there's a good chance your 401(k) plan will accomplish this." (CBS MoneyWatch)
[Opinion] ERIC Offers Recommendations to Improve Treasury Lifetime Income Guidance
"[ERIC] submitted to [Treasury and IRS] a series of three comment letters in response to their February 2012 package of proposed regulations and revenue rulings regarding lifetime-income options for participants and beneficiaries in retirement plans.... ERIC's three comment letters offer recommendations addressing the longevity annuity contract regulations, the partial annuity regulations, and the revenue ruling concerning rollovers from defined contribution [plans to defined benefit] plans[.]" (The ERISA Industry Committee)
[Opinion] American Benefits Council Comment Letter to IRS on Priority Guidance Plan (PDF)
"The Council is writing to recommend items relating to employee benefit matters that should be included on the [IRS] 2012-2013 Guidance Priority List. The Council is submitting a letter separately recommending a project to modify the current nondiscrimination and minimum participation regulations to protect older, long-service participants. This letter focuses on other recommendations for the Guidance Priority List." (American Benefits Council)
[Guidance Overview] Waiver of 60-Day Rollover Requirement Granted to Taxpayer Who Mistakenly Requested Duplicate IRA Distribution
"The taxpayer's failure to accomplish a timely rollover was due to the error by the financial institution which caused her to request the duplicate distribution. Therefore, the IRS waived the 60-day rollover requirement and the taxpayer was given 60 days to roll over the duplicate distribution." (Wolters Kluwer Law & Business / CCH)
Retirement Plan Rollover Chart (PDF)
"This is a chart of what the [IRS] regards as permissible when rolling funds over from one type of retirement account to another." (401khelpcenter.com)
FAA Funding Law Permits Rollover of Amounts Received in Airline Carrier Bankruptcy
"The Federal Aviation Administration ... Modernization and Reform Act of 2012 (P.L. 112-95), signed by the President on February 14, 2012, contains provisions permitting qualified airline employees to roll over to an IRA amounts received in an airline carrier bankruptcy." (Wolters Kluwer Law & Business / CCH)
Eight Points to Consider before Rolling Over a 401(k) to an IRA
"[S]ometimes it does make the most sense to leave your money in the old plan. Listed [in this article] are eight possible reasons that you might want to do just that." (Forbes)
Ensure your Plan Participants are Prepared for a Secure Retirement
Defined Contribution Conference, March 11-13, in Miami. Learn from your peers through presentations and discussions on plan design, communications, investment options and more. FREE registration for qualified plan sponsors. (Pensions & Investments)
Avoid the Common Mistakes Affecting Plan Loans Webcast
Earn CE credit while ERISA expert, Charles Lockwood, JD, LLM, explains the administrative issues that affect plan loans. Have questions? Charles will address them either during or after the webcast. March 22nd at 2pm EST. (ASC)
[Guidance Overview] IRS Allows Pension Annuity Purchases with Rollovers from Sponsor's DC Plan
"IRS's Revenue Ruling 2012-4 provides retirement plan sponsors guidance that permits their qualified defined benefit (DB) plan the ability to accept a direct rollover from their qualified defined contribution plan (DC), allowing participants to purchase an annuity that is incremental to the amount the DB plan would ordinarily provide." (Milliman)
[Guidance Overview] IRS Guidance for Annuitizing Distribution Rolled Over from Defined Comp Plan to Defined Benefit Plan of Same Employer
"For an employer that sponsors both a 401(k) (or other defined contribution plan) and a defined benefit plan, the ruling provides a 'road map' for offering employees the option of transferring some or all of their 401(k) plan payouts to the defined benefit plan in exchange for an immediate annuity from that plan, ..." (Wolters Kluwer Law & Business / CCH)
PBGC Semiannual Regulatory Agenda Addresses Cash Balance Plans, Missing Participants, Rollovers, Airline Plans
"The Pension Benefit Guaranty Corporation . . . has released its semiannual regulatory agenda for Fall 2011, which outlines regulations that have been selected for amendment during the next year." (Wolters Kluwer Law & Business / CCH)
Report of Council of Economic Advisers: 'Supporting Retirement for American Families' (PDF)
Feb. 2, 2012. 'While economic studies have established the benefits of annuitization for retirees -- including both immediate and longevity annuities -- many workers have only limited access to these products. The administrative guidance issued by the Treasury today, easing and simplifying certain regulatory requirements for retirement plans and IRAs, takes an important first step towards a more complete private market offering more attractive lifetime income options." (Council of Economic Advisers, Executive Office of the President)
[Official Guidance] Rev. Rul. 2012-3: Application of Survivor Annuity Requirements to Deferred Annuity Contracts Under a Defined Contribution Plan (PDF)
"Issue: How do the qualified joint and survivor annuity ('QJSA') and the qualified preretirement survivor annuity ('QPSA') rules, described in ?? 401(a)(11) and 417 of the Internal Revenue Code, apply when a deferred annuity contract is purchased under a profit-sharing plan in the situations described below?" (U.S. Internal Revenue Service)
[Official Guidance] Rev. Rul. 2012-2: Rollover from Qualified Defined Contribution Plan to Qualified Defined Benefit Plan to Obtain Additional Annuity (PDF)
"Issues: [1] Does a qualified defined benefit pension plan that accepts a direct rollover of an eligible rollover distribution from a qualified defined contribution plan maintained by the same employer satisfy ?? 411 and 415 of the Internal Revenue Code in a case in which the defined benefit plan provides an annuity resulting from the direct rollover that is determined by converting the amount directly rolled over into an actuarially equivalent immediate annuity using the applicable interest rate and the applicable mortality table under ? 417(e)? [2] How does the result vary if the defined benefit plan applies different conversion factors for purposes of calculating the annuity resulting from the amount directly rolled over?" (U.S. Internal Revenue Service)
What Should You Do with 401(k) Funds at Retirement?
"Retirees who want to keep investments sheltered from paying current taxes will essentially have two options. Savings can be left in a company retirement plan, where retirees can keep their money in a lineup of funds chosen by the company. Or the assets can be rolled over into another tax-favored account, generally an individual retirement account, which provides investors with control over investment choices and makes it easier to work with a financial adviser." (The Wall Street Journal)
[Guidance Overview] IRS Guidance on Reporting 2010 Roth IRA Rollovers and Conversions and 2011 Distributions
"The taxpayer may have to include in 2011 income all or some of the taxable amount of the 2010 rollovers and conversion to a Roth IRA and in-plan Roth rollovers that would have otherwise been included in 2012 income. To determine the amount to report in 2011, the taxpayer must complete the 2011 Form 8606, using Part III, for distributions from a Roth IRA and Part IV, for distributions from a designated Roth account." (Wolters Kluwer Law & Business / CCH)
Should You Roll Over Your 401(k)?
"[T]he most common advice that retirees with 401(k) money receive is to roll the plan over into an individual retirement account (IRA). But is this really always the best option? Although the answer to this is clearly yes in many cases, this article will examine the pros and cons of this common financial transaction, and when it may make sense to avoid it." (Investopedia US via Hearst Communications Inc.)
[Guidance Overview] The DOL's Position on 'Capturing' Rollovers (PDF)
"This article examines statements made by [DOL] regarding distributions and rollovers from qualified plans to IRAs. We are advising RIA and broker-dealer clients on how to structure their rollover programs in light of this guidance, and it is important for advisers to understand the DOL's views on this significant issue." (Drinker Biddle & Reath LLP)
[Official Guidance] 2011 Reporting for 2010 Roth Rollovers and Conversions
"In 2010, you may have: rolled over eligible distributions from a retirement plan to a Roth IRA, converted (transferred) amounts from a non-Roth IRA to a Roth IRA, or made an in-plan Roth rollover (after September 27, 2010). If so, you must report half of the taxable amount of these 2010 rollovers and conversions on your 2011 income tax return unless you . . . ." (U.S. Internal Revenue Service)
How to Use Retirement Funds to Start a Business
"Rolling over a qualified retirement plan is a good way to inject equity into your business without penalty, says Steve Stovall, vice president of business development at Benetrends, which helps entrepreneurs and small-business owners create funding strategies for their businesses." (TheStreet, Inc.)
403(b) Advisor, Spring 2011 Edition
Articles include: Questions and Answers about the New Roth Rollovers in 403(b) Plans and Building Retirement from Floor to Ceiling in the Trend Spotting column. (National Tax Sheltered Accounts Association / American Society of Pension Professional and Actuaries)
Tax Benefits and Allocation Issues in Rollovers to Roth IRAs
"The goal of this analysis is to provide practitioners with an overview of the potential retirement and estate planning benefits of rollovers from a 401(k) plan into a Roth IRA, as well as to alert practitioners to the impact that common 401(k) plan distribution rules will have on the tax benefits of such a rollover in light of the current IRS allocation rules." (Texas Tax Lawyer via Haynes and Boone, LLP)
Top Firms for 401(k) Rollovers by IRA Investors
"A report released Thursday by Spectrem surveyed nearly 1,000 investors who had recently made a rollover or had the opportunity to rollover assets, and found nearly one-third chose Fidelity as their IRA provider. Vanguard was a distant second at 11%." (AdvisorOne)
Advice for Transferring 401(k) Plans
"Ideally, you should request a 'trustee-to-trustee transfer,' . . . . In that case, the funds would go directly from the 401(k) plan to the new custodian." (New Jersey On-Line LLC.)
[Guidance Overview] Waiver of 60-Day Rollover Requirement Granted to Fix Unsuccessful Transfer of IRA Funds
"The IRS determined that the information and documentation submitted by the taxpayers were consistent with their assertion that their failure to make a timely rollover was caused by incorrect advice from their financial adviser. Therefore, the IRS waived the 60-day rollover requirement for the distributions from the IRAs and granted the taxpayers 60 days from the issuance of the letter ruling to contribute their funds to a rollover IRA." (Wolters Kluwer Law & Business / CCH)
[Guidance Overview] The Inherited IRA: Guidelines
"The IRA must be identified explicitly as an IRA with respect to a decedent. The names of the decedent and the beneficiary must be included in its title; for example, 'Mary Smith as beneficiary of John Smith.'" (McKay Hochman Co., Inc.)
[Opinion] Why Plan Participants Are Being Harmed by DOL's Existing Regulations Regarding IRA Rollovers
"To begin with, most advisors will not to touch any account subject to ERISA with a 10-foot pole. With regard to providing advice to 401(k) participants, that reluctance was only solidified with the passage of the Pension Protection Act and its ominous references to certification requirements, the necessity of relying upon pre-approved computerized models, and the expense of annual independent audits." (Business of Benefits)
[Opinion] Ex-Employees Who Don't Rollover: Will 401k Fees Increase Plan Sponsor Liability?
"To determine the extent of their potential added fiduciary liability, 401k plan sponsors must first discover what makes it so convincing for ex-employees to rollover their 401k into a personal IRA ? and perhaps learn why this advice is considered controversial." (Fiduciary News)
Moving Retirement Plan Assets: How to Avoid Mistakes
"When you move your retirement assets from one plan to another, the receiving plan must be eligible to receive the assets. If you move the assets to the wrong type of retirement plan, you lose the tax-deferred status of the moved assets and may also create unintentional tax consequences." (San Francisco Chronicle)
[Guidance Overview] No Waiver of 60-Day IRA Rollover Limit to Help Mom
"The taxpayer requested a waiver of the 60-day limit under Rev. Proc. 2003-16, claiming that he used the IRA distribution for a short-term purpose but that he always intended to roll over the same amount back into his IRA, and that his failure to accomplish a timely rollover was due to numerous and unreasonable processing delays by the bank which were beyond his control." (The Bureau of National Affairs, Inc.)
How to Protect Your 401(k) If You Leave Your Job
"Generally, you can leave the money with your ex-employer, move it to your new employer's plan (if that company allows it), roll it to an individual retirement account or cash out. Each choice comes with potentially negative consequences for your savings." (MarketWatch, Inc.)
Panel Discussion Video on Retirement in Today's Economy
"From fluctuating markets to concerns about inflation to simple questions regarding where we go from here, this can seem to be a confusing time to retire. Should you ride out the market? How should you invest if you're still years away from retiring?' (GuideStone)
[Guidance Overview] No Waiver of 60-Day IRA Rollover Limit to Help Mom
"The taxpayer requested a waiver of the 60-day limit under Rev. Proc. 2003-16, claiming that he used the IRA distribution for a short-term purpose but that he always intended to roll over the same amount back into his IRA . . . ." (Tax Management Inc.)
Funding a New Business With a 401(k)
A Rollover as Business Startup, or ROBS, is a little-known and somewhat controversial tax move. 401(k) particitpants can fund an enterprise without paying early-withdrawal penalties. (SmartMoney)
[Opinion] Council Position on Advice upon Participant Rollovers from Qualified Retirement Plans (PDF)
"To help larger numbers reach successful retirement outcomes, the Council urges regulators to review applicable regulations with the ultimate goal to exempt from prohibited transaction status the provision of advice to participants by that plan's advisor(s) at the time of a distributable event." (DC Plan Investment Council)
Target-Date Funds Should Look Beyond One Date
"Among [the observations made from recent research]: Once they retire, most target-date fund holders in 401(k) plans move to IRAs, where withdrawals are relatively infrequent in the early years of retirement. Target-date funds should be designed with a long-term horizon that considers investor behavior well into retirement, since withdrawals are intermittent and infrequent until age 70." (The Vanguard Group, Inc.)
Never Cash Out Retirement Accounts When Switching Jobs
"Withdrawing the funds from your retirement account before you are of retirement age is a financially dumb move nearly 100% of the time." (Retirement Online LLC)
Distribution Decisions Among Retirement-Age Defined Contribution Plan Participants (PDF)
"The [majority of retirement-age DC]) plan participants leave their employer's retirement plan within five years of separation from service . . . . This finding has implications for the 'to versus through' debate in target-date fund design, as well as for the demand for in-plan versus out-of-plan retirement income programs." (The Vanguard Group)
[Guidance Overview] Qualified Plans Issues Relating to Rollovers for Roth Conversions (PDF)
"This column explores potential impacts on qualified defined contribution plans and legal issues that may be raised as more participants seek to take distributions from qualified plans in order to move funds to Roth IRAs. The column covers plan design, plan operation, and [IRS] reporting issues to consider in light of potential increases in demand for in-service distributions from qualified defined contribution plans." (Aspen Publishers via Steptoe & Johnson, LLP)
Qualified Retirement Plans: Analysis of Distribution and Rollover Activity
Excerpt: "The probability of receiving a distribution and the fraction of gross distributions cashed out are roughly equal across income groups, but the portion cashed out represents a higher percentage of income for the lower-income groups." (The Pension Research Council; registration required to download papers)
Appendix: Expanded Data Description and Analysis for Traditional IRA Investors' Rollover Activity, 2007 and 2008 (PDF)
50 pages. Excerpt: "This appendix supplements the material presented in the main report. First, this appendix provides more details about The IRA Investor Database, with a particular focus on comparing it to the IRA universe tabulated by the IRS Statistics of Income Division. Second, comprehensive tables show how the incidence of rollover activity among traditional IRA investors varies systematically across multiple dimensions like age, income, and gender. Third, tables show how the magnitude of traditional IRA rollovers varies by age, income, and gender. Finally, this appendix includes details across demographic and socioeconomic groups about the cumulative incidence of rollover activity between 2007 and 2008." (Investment Company Institute)
[Guidance Overview] IRS Clarification of Taxation of In-Plan Roth 401(k) Rollovers
Excerpt: "In the newly issued formal guidance, the IRS illustrates the applicable tax treatment of rollovers and subsequent distributions from Roth accounts and provides for retroactive plan amendments implementing the rollovers." (Wolters Kluwer)
[Guidance Overview] Portability Chart As of 2010: Rollover to Recipient Plan
Excerpt: "Traditional IRAs & SEP IRAs may not be rolled into a Roth IRA, but there is a conversion process. As of 2010, TIPRA permits conversion to a Roth IRA without AGI limit, and without joint return requirement for married individuals." (McKay Hochman Co., Inc.)
[Guidance Overview] IRS Guidance Addresses In-Plan Roth Rollovers, Including Plan Amendments, Taxation, Reporting, and Disclosure
Excerpt: "Given the short timeframe for implementing in-plan Roth rollovers for 2010, plan sponsors may well need the extended deadline for adopting a plan amendment. But beware: Plans intending to add in-plan Roth conversions in time for participants to take advantage of the special two-year income spreading rule must still have a program in place before year-end, as the rule applies only for distributions made in 2010." (Employee Benefits Institute of America)
[Guidance Overview] 2011 Retirement Funds Rollover Chart (PDF)
1 page. Excerpt: "This is a chart of what the Internal Revenue Service regards as permissible when rolling funds over from one type of retirement account to another." (401khelpcenter.com)
[Official Guidance] Text of IRS Notice 2010-84: Guidance on In-Plan Roth Rollovers; Extended Deadline for Amendments (PDF)
12 pages; Q&A format, including examples. Excerpt: "[T]o give [401(k)] plan sponsors sufficient time to adopt plan amendments and thereby enable plan participants to make in-plan Roth rollovers before the end of the 2010 plan year, the Service is extending the deadline for adopting a plan amendment described in Q&A-17 . . . to the later of the last day of the plan year in which the amendment is effective or December 31, 2011, provided that the amendment is effective as of the date the plan first operates in accordance with the amendment. . . . [Q&A 17:] The extension of time . . . applies to any plan amendment that is adopted pursuant to ? 2112 of SBJA. Thus, for example, if a . . . plan is amended to permit in-plan Roth rollovers, the [extension] applies to a plan amendment that permits elective deferrals under the plan to be designated as Roth contributions, a plan amendment that provides for the acceptance of rollover contributions by the designated Roth account, and the plan amendment that permits in-plan Roth rollovers . . . ." (Internal Revenue Service)
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