Guest donmartin Posted September 12, 2006 Posted September 12, 2006 When closing a Defined Benefit Plan that is fully funded, may the Plan pay out a cash payment in the form of a tax deferred custodian to custodian rollover to an IRA? (like when transferring funds from a 401k to an IRA). The beneficiary does not want an annuity and is age 51.
SoCalActuary Posted September 12, 2006 Posted September 12, 2006 You are describing a lump sum distribution to a rollover account. This is done all the time, but the plan document must permit lump sum distributions. Most small plans under 25 lives have 98% or more of their distributions in this manner.
mwyatt Posted September 13, 2006 Posted September 13, 2006 98%? Generously low; I've yet to see an annuity contract purchased in 23 years in the small plan market where lump sum is available .
John Feldt ERPA CPC QPA Posted September 13, 2006 Posted September 13, 2006 In 17 years we've seen one - selected $21.05 per month J&50% - ppt age was in low 30's. May have wanted to avoid getting spousal consent for the lump sum?
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