Section 828 of the PPA

[Guest GLBath]

If a qualified public safety employee - age 50 - rolled a portion of his DB plan from a governmental plan into a 457 plan administered by that same employer - does the 457 plan have to track the money separately so the participant does not have to pay the 10% if he takes a distribution from the DC plan from that rollover money prior to turning age 59 1/2? As you know, we currently track rollover money separately in 457 plans as it does not take on the attributes of the 457 plan, but I'm not sure Question 9 in IRS Notice 2007-7 addresses 457 plans when it says specifically that the relief from the 10% does not follow the money from the DB to DC. Can someone help me with their interpretation of this provision? Thanks.

notice20077.end.pdf