Rollovers by non-spouse beneficiaries

[Guest PGH.ERISA]

If a 401(k) plan permits Roth 401(k) contributions, and if a non-spouse beneficiary becomes entitled to receive a distribution of Roth 401(k) money upon a participant's death, can the Roth 401(k) account be rolled over to a Roth IRA? A literal reading of 402©(11) would say "no", as 402©(11) only refers to traditional IRAs, but to me it does not make sense to have part of the distribution be ineligible for rollover, and I was wondering if anyone had seen guidance from the IRS.

[masteff]

Not that it's an official source but this Prudential analysis concludes that non-spouse benes cannot rollover Roth deferral accounts.

http://www.prudential.com/media/managed/Pe...nalRothregs.pdf

[Guest PGH.ERISA]

Notice 2008-30 states clearly that non-spouse beneficiaries can make direct rollovers to Roth IRAs, but it appears to be speaking only in the context of permissible rollovers of non-Roth 401(k) funds. It appears that the IRS position would likely be that direct rollovers should also be available to non-spouse beneficiaries in the case of Roth 401(k) funds, and without the income or filing status restrictions. However, I don't see anything specific on that point in Notice 2008-30, and I have not seen anything else from the IRS on that subject. Does anyone know of definitive guidance?

[Guest PGH.ERISA]

I received a call from the IRS today, telling me that the unpublished IRS position is that direct rollovers can be made available to non-spouse beneficiaries in the case of Roth 401(k) funds, and without the income or filing status restrictions that apply to rollovers of non-Roth deferral money.