Rollover assets and new plan rules

[Alf]

I think it is important to clarify whether you are talking about a true "rollover" (in which a participant receives a distribution from a prior plan and contributes it to a new plan) or a transfer or merger (in which there was no distribution from the prior plan, but the trustee sent accounts to the new plan). If it is a rollover, it is a contribution that is subject to whatever rules the NEW plan provides for rollover contributions and rollover accounts (it is free of the old plan's rules because there was a distribution to a participant). If it is a transfer, it is subject to the rules of the old plan and the new plan. Confusing, huh?

[Guest fusiuser]

Can anyone shed light on this....I am under the impression when you do a rollover of assets into a new plan,those assets will have to follow the rules of that new plan (i.e. if the plan does not allow a pre-retirement distribution then you can not withdraw any of your money types) Is this true? I have someone insisting that if it is rollover assets then you can withdraw the cash from the new plan at anytime even if it does not allow for pre-retirement distributions. This I never heard...am I missing something?

[KJohnson]

A plan can provide for immediate distribution of a rollover account and you do not have to worry about the "seasoned money" or stated age rules mandated for in-service distributions from profit sharing plans.

But, if the plan does not provide for "any time" distribution of a rollover account, they cannot get a distribution.

[Guest [Pat M]]

Would be a non-issue if recordkeeping systems included separate account fields/tables for each type of money to which various rules apply. Conversion balances within plan should not be merged with rollover fields. Is it just sloppy programming? Even if current distribution rules for a plan are the same for both accounts, unforeseen plan amendments could necessitate reprogramming, anyway.