Rollover from an IRA to an eligible plan

[Lori Friedman]

Please help. I can't find any guidance about this matter.

First, an individual is now allowed to roll over funds from an IRA to an eligible retirement plan (including a qualified plan or a 403(b) plan).

Second, the beginning date of minimum required distributions from a retirement plan, but not an IRA, can now be delayed until the individual's retirement after age 70-1/2.

My question: What's the correct treatment of IRA funds that have been rolled into the eligible retirement plan? Does the rollover retain its IRA character, and are distributions required to begin at age 70-1/2? Or, does the rollover acquire the properties of the eligible plan, and can distributions be delayed until a later year?

I've found just one bit of guidance about this matter. The Panel (Aspen) Pension Answer Book - 2004 Edition states that "IRS representatives have opined that an IRA owner may roll over funds from an IRA to a qualified retirement plan and delay required minimum distributions until retirement..." But, who are these "IRS representatives", and where have their opinions been circulated? I really need more guidance than this one passing reference.

Thank you.

[mbozek]

IRS officials are not allowed to be quoted for attribution. However, the rules for IRA distributions require that MRDs be taken each year after the employee attains 70- 1/2 based upon the account balance as of 12/31 of the prior year. A rollover of IRA assets to a Qual plan or 403(b) plan will result in an account balance of 0 as of the end of the year which will require an MRD of 0 at 70 1/2. After the funds have been rolled over to a Q plan or 403(b) plan they are regarded as assets of such plan subject to the distribution rules for such plans and not assets of the IRA. See reg 1.401(a)(9)-7 Q/A 1 to 4. Note: after tax funds cannot be rolled over from an IRA to a Q plan or 403(b) plan.

[Appleby]

See also Rev Rul 2004-12 attached

Rev_Rul_2004_12.pdf