Rollovers to 401(k) Post-EGTRRA

[Guest Benecon]

401(k) plans may accept "direct rollovers" from IRAs/individual retirement annuities beginning 1/1/02 as a result of EGTRRA.

May 401(k) plans also accept "direct transfers" from IRAs/individual retirement annuities? What is the difference between a "direct transfer" and a "direct rollover"?

[Appleby]

Technically, a direct transfer is a non-reportable transfer ( movenemt of assets) that occurs between trustees/custodians or plans. These are never reported as distributions ( on 1099-Rs). A direct transfer ( trustee-to-trustee transfer) can only occur between similar types of plans, for instance between two traditional IRAs or between two QRPs maintained by the same employer.. To move assets from an IRA to a qualified plan, it must be done as a direct rollover- not a transfer. A 1099-R must be issued for the distribution from the IRA