Non-Spouse Beneficiary IRA Rollover

[Guest andmik]

A named designated non-spouse beneficiary received QRP account due to death of participant in 2003. She started a 15-year installment payment stream. First installment payment made in 2004 (year following year of death), then subsequent payments made in 2005, 2006, 2007, and 2008.

Plan requires non-spouse beneficiaries to take payment in either lump sum within 90 days following the end of the year of the death, or in installment payments not exceeding 20 years.

The 5th installment payment has been paid in 2008.

The designated non-spouse beneficiary now wants to rollover the remaining balance of $150K to an Inherited IRA.

Given that the plan does not specifically limit the distribution to a 5-year rule, but rather allows non-spouse beneficiaries to take installments up to 20 years, I am not sure the new non-spouse beneficiary rules provide for the ability to roll any of these assets to the Inherited IRA this long after the death (since the rules did not exist at that time for Inherited IRAs).

I do not see any exception for a death that occurred years ago (prior to 2006), to allow a post-2006 PPA non-spouse beneficiary rollover to an Inherited IRA to be allowed this late in the installment process that will provide a tax benefit.

Any thoughts as to an allowance of an Inherited IRA after this prolonged period would be appreciated.

Thank you,

Andmik

[Bird]

To my way of thinking, this is strictly a plan issue - the bene elected a form of payment, presumably irrevocable, and now wants to change it. That's what it boils down to - was the election of an installment irrevocable, and if so, tough.