401(k) rollover

[Benefits to all]

Anyone provide anything specific as to why a husband cannot rollover his 401(k) into his wife's retirement plan? I know (or at least believe) that he cannot because the TIN or SS has to be the same, but I cannot find anything that directly confirms this in the Code or Regs. Any insight welcome.

[BG5150]

Look no further than the plan document. It probably says rollovers can only be done by "participants" or current employees expected to become participants.

Since the husband is neither a participant nor and employee, the plan precludes the rollover.

[ESOP Guy]

If I understand the question correctly the husband doesn't work for the same company as the wife correct?

If that is true the plan document is going to require a rollover into the plan to come from either and employee or a participant. The husband is neither of those types of people.

The wife can't roll it into the plan because it isn't her money to roll in to the plan.

If the husband gifts the money to the wife she can't roll it into the plan because it isn't coming from another IRA or qualified plan-- it came from a gift.

I think I have covered all the possible ways to think of this.

Edit:

BG5150 replied while I was writing my reply didn't mean to be a repeat.

[Benefits to all]

Look no further than the plan document. It probably says rollovers can only be done by "participants" or current employees expected to become participants.

Since the husband is neither a participant nor and employee, the plan precludes the rollover.

Thanks BG, and I would agree it would be as simple as that in terms of precluding the rollover. I do not have the plan document and although I agree with you, there has to be something that disallows it somewhere in the Code, right?

And ESOP guy, the Code rules for a rollover (402) provides that an employee can rollover it over into any qualified plan. It does not say "the participant's" or "the employee's" qualified plan, but common sense would dicate this to be the case. The code essentially provides for a spouse beneficiary to rollover but that is because they are a direct payee. The code provisions themselves just say that an eligible rollover distribution to an eligible retirement plan with neither definition limiting it to the participant's individual plan.

[Kevin C]

With limited exceptions that do not apply here, plan benefits can not be assigned or alienated. See IRC 401(a)(13)(A). That means the husband's benefits can not be paid to his wife or anyone else. That's why the receiving account has to be in the husband's name. A QDRO would be one of the exceptions, but that wasn't mentioned.

[masteff]

The short answer on why the plan doesn't accept the husband's rollover is that it doesn't have to if it doesn't want to... see reg 1.401(a)(31)-1 Q&A-13.

It would be helpful to me to understand the connection between the wife and her plan. Is she merely an employee of a company and participates in the company's plan or is she the owner of the company and wants to let her husband join the plan over which she has control? If it's the later, then she simply puts him on payroll long enough to do the rollover.

[Benefits to all]

With limited exceptions that do not apply here, plan benefits can not be assigned or alienated. See IRC 401(a)(13)(A). That means the husband's benefits can not be paid to his wife or anyone else. That's why the receiving account has to be in the husband's name. A QDRO would be one of the exceptions, but that wasn't mentioned.

Thanks Kevin! I think that is the winner. Just needed something to point to although the answer seemed self-evident.

And Masteff, I agree with the plan statement. The facts were laid out with no real knowledge of the wife's plan. Simply, a husband wanted to do this (and the wife was just an employee), I figured the plan would not let him, but wanted something specific in the Code to point to and say "this cannot happen."

Thanks for all the responses.