Related Money Purchase Rollover in 401(k) Profit Sharing Plan

[CLE401kGuy]

401(k) Profit Sharing plan has Money Purchase related rollover dollars in it....

It no longer requires J & S annuity - but the MP rollover piece still retains that requirement from the transferring plan (i.e. the MP) - so you'd require spousal consent... Also, if the 401(k) PS permits in-service at 59 1/2 is the MP rollover piece precluded until either age 62 or the NRA in the plan...

I'm looking up the rules, but not putting my finger on it! Thanks

[ETA Consulting LLC]

The rule is that those same MP distribution restrictions will remain with those funds. So, you would not be allowed a distribution from the MP source at 59 1/2. You must wait; unless your NRA for the MP is 59 1/2.

Good Luck!

[QDROphile]

Unless you are misuing the term rollover, none of the MPP attributes survive a rollover. The dollars are just rollover dollars, subject to the terms of the plan concerning rollover dollars. The plan could allow distribution of rollover dollars at any time.

[CLE401kGuy]

It's a related rollover - so the client had a MP plan, terminated it and balances were rolled into the sponsors 401k PS Plan - so distribution is permitted at NRA from the original MP plan it appears

[ETA Consulting LLC]

To QDROphile's point, the amounts were transferred to the 401(k) PS plan due to plan merger. I agree that 'rollover' is a bit misleading.

Good Luck!

[ESOP Guy]

To get more specific on the rollover vs transfers here is the difference:

1) Did the participants of the MPP complete distribution forms and have the choice to take the money, roll to an IRA or roll to the PSP?

or

2) Was the money transfered by the trustee from the MPP to the PSP?

Depending on which one of those happened will drive how you answer your original question.

[austin3515]

Also, I think that for top-heavy purposes, even if it was a plan termination/rollover, you still need to include the rollovers in the top-heavy ratio. I almost fell out of my chair when I read that in the EOB two weeks ago.

[TPApril]

On the theme of transferring money between plans sponsored by the same Plan Sponsor - can a participant in both plans, which are still active, transfer her 401(k) balance into the MP plan? Or since they are both still active it would not be allowed? My instinct says no, but i haven't had this question before.

[Bird]

11 hours ago, TPApril said:

On the theme of transferring money between plans sponsored by the same Plan Sponsor - can a participant in both plans, which are still active, transfer her 401(k) balance into the MP plan? Or since they are both still active it would not be allowed? My instinct says no, but i haven't had this question before.

If she has a distributable event (e.g. attainment of age 59 1/2, if the plan allows), then she can do whatever she wants, including a rollover to the MP plan, assuming the MP plan allows rollovers.  Otherwise, no.