unforseen emergency

[Felicia]

Is an unforseen emergency distribution from a governmental 457(b) an eligible rollover distribution?

[saabraa]

Revenue Procedure 2004-56 contains model amendments designed to meet the section 457 requirements. Section 4 of the revenue procedure says an employer using the amendments has reliance that section 457 is being complied with. Section 5.12(b) says an unforseen emergency is not an eligible rollover distribution.

I haven't been able to find anything in the code or regulations that knocks unforseen emergencies out of rollover status. Certainly it's logical to treat these distributions in the same way as a hardship distribution, and hardships definitely are not eligible for rollover.

Based on the above, anyone trying to roll an unforseen emergency is walking on thin ice.

[Everett Moreland]

IRC Section 402©(3)© excludes from eligible rollover distributions "any distribution which is made upon hardship of the employee."

[joel]

Severance of employment is necessary to effectuate an eligible rollover distribution from a 457(b) plan.