Eligible rollover distribution and rolling in to the same employer's p

[Guest youngt]

A client has 3 defined contribution plans.

An employee is a participant in all three plans. The employee retires. He wants to roll his money out of two of the plans into the third plan.

I stress he is no longer an employee nor is he a participant in the plan to which he wants to roll the money. The Plan accepts rollovers from participants and employees and we could amend to say it will accept roll-ins of eligible rollvoer distributions from former employees. I don't see any problem with this - any thoughts???

[Earl]

i have a client who had a problem in a similar situation. The idea was you can accept rollovers from employees "in anticipation of becoming participants". Here they got into trouble accepting a rollover because the people were never going to become participants.

It was an audit pre-my take over of the plan.

I never could get real details from the cleint. Just be careful. The IRS made them pay some money. Thats all i know

[This message has been edited by Earl (edited 04-15-2000).]

[Guest]

There is nothing wrong with this.

In fact, there was a PLR three or four years ago where an employee retired, took a lump sum, rolled it into a conduit IRA, and then rolled the conduit IRA back into the original qualified plan.