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Pension distribution to Roth IRA


Guest jaspers
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Guest jaspers

Client is going to receive a distribution from a public defined benefit plan upon seperation of service. The distribution will consist of some "tax free" and taxable money. The taxable portion will get rolled over to an IRA. Can the individual roll the tax-free portion directly to a Roth IRA? I believe as of 1-01-08 taxable distributions can be rolled over directly to a Roth IRA, but can the client roll the tax-free portion to the Roth IRA.

Thank-you.

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"Any amount rolled over is subject to the same rules for converting a traditional IRA into a Roth IRA."

(IRS Pub 590, page 64, 2nd column, "Rollovers from other retirement plans". http://www.irs.gov/pub/irs-pdf/p590.pdf )

Since you can rollover aftertax money to a traditional IRA and since I don't see anything restricting that aftertax money from being converted to a Roth, I don't see why you would need to do anything special.

I'd be happy for someone to correct me if I'm reading this wrong.

Kurt Vonnegut: 'To be is to do'-Socrates 'To do is to be'-Jean-Paul Sartre 'Do be do be do'-Frank Sinatra

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