Rollover(s) from Multiple Plans

[Christine Roberts]

An alternate payee is planning to roll her share of assets from a MPP/PSP arrangement to an IRA or IRAs, pursuant to a QDRO. Is there any reason she shouldn't combine the assets from the two plans into one IRA, or conversely is there any reason she should keep each plan's assets in separate IRAs. The assets in each plan are roughly similar.

------------------

[bzorc]

I would see no reason why the distributions cannot be combined into one IRA. It would be important for the person to keep the qualified plan rollovers separate from personal IRA's, in case the participant would want to roll the money into another qualified plan; i.e., a conduit IRA.

Hope this helps.

[Guest Bob Collins]

Alternate Payee distribuitons from a qualified plan or 403(B) plan are not subject to the 10% early distribution penalty; however, once the money goes into the IRA a distribuiton for a person under age 59 1/2 may be subject to the 10% penalty. Thus is the alternate payee is younger, its best to leave some or all the money in the retirement plan.

As long the former spouse is alive, money that is QDRO money that is rolled to an IRA can be rolled back into a similar plan by the altnernate payee. If qualified and 403(B) money is mixed, the alternate payee losses the right to roll the money back into a qualified or 403(B) plan.