the $5,000 limit - guess we can't ignore rollovers now

[JanetM]

The rules changed few years back to allow you to disregard the rollover balance in a plan when deciding if balance was less than $5,000.

The new automatic rollover cap is $5,000. Can someone confirm my understanding that if person has 3,000 in current company funds and 3,000 in funds rolled from previous employer a mandatory distribution can not be made.

Guess my problem is that the "safe harbor" applies to only distributions of 5,000 or less.

[wmyer]

I disagree. The final regulations specifically state that some mandatory distributions will be more than $5,000 because of additional funds attributable to prior rollover contributions. However, the plan can specify whether or not to include the amount of the rollover contributions (and earnings thereupon) for purposes of the $5,000 cash-out amount.

[JanetM]

Right, I just finished reading the Federal Register. Time to stop listening others and go straight to the regs.