NonSpouse Beneficiary and PPA

[Guest lvegas]

My understanding of the new rule under the PPA permitting non-spouse beneficiaries to roll amounts out of a plan is that even though such amounts can be rolled, they are not considered "eligible rollover distributions" for purposes of the tax withholding rules. In other words, unlike where a surviving spouse decides not to roll amounts over, a designated beneficiary that elects against setting up and rolling to an IRA would not be subject to mandatory 20% withholding. (The basis for the treatment of the spouse's distribution is 402©(9), which treats spouse as if he/she was employee -- ©(11) has no such provision.) Is that correct?

Will this be an issue that will be addressed in the IRS' update of the 402(f) notice?