husband's distribution and roll over to wife, in same plan

[Guest cbclark]

We got a very strange question today, and not one of us has ever encountered it. And all of us are apparently having heat-induced brain meltdowns.

Two married people are in the same plan. Husband wants to retire or go on disability or get a plan-permitted in-service distribution (we are not sure which, not even sure he is leaving the employer...). He wants to know if he can roll the money into his wife's plan account. Or just transfer his account to her. We all have the same automatic reaction of NO but we don't know why. Any ideas? There is no divorce, no court order, just a strange guy and his strange request. Thanks in advance!

[GMK]

More than one of us will be surprised if the Plan Document provides the participant the option to roll over or transfer the participant's account balance to another participant's account.

Generally, no benefit or interest in the Plan will be subject to assignment or alienation, either voluntary or involuntary, except pursuant to a QDRO.

[Guest cbclark]

Thanks. We had noodled the anti-alienation aspect to death but of course the plan sponsor contact wants to know "why" since it "seems like a good idea..."

[david rigby]

Soemthing else going on?

The reference to disability gives rise to the thought he's trying to hide some assets (not that the plan, or ER, cares why).

[masteff]

but of course the plan sponsor contact wants to know "why" since it "seems like a good idea..."

Since the relevant code section hasn't been explicitly stated in this thread: 401(a)(13)(A) says in part: "A trust shall not constitute a qualified trust under this section unless the plan of which such trust is a part provides that benefits provided under the plan may not be assigned or alienated."

I'd explain it's a double-edged sword... to protect it from creditors then it also can't just be given away to non-creditors.