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Posted

The Notice says the Plan seeking recoupment notifies the recipient plan and the participant of the overpayment. It states the tax consequences and how the overpayment can be transferred back without the participant incurring taxable income.  What I do not see is authorization for the recipient plan to just transfer the money back without the participant's consent.  Can the recipient plan transfer the funds back solely on the basis of the notice and the Notice?  That is, can this be done without liability to the participant?

Posted

well - if the overpayment puts the tax favored status of the recipient at jeopardy, I don't see why the plan that received the money that was not eligible for rollover would want to hold on to it. And 401(k) plans are trusts, so the trustees and plan administrators can take action without the participant's consent all the time. 

Holding on to money that is NOT eligible for rollover - seems like a very bad idea. Send it back to where it came from. 

I'm a stranger on the internet. Nothing I write is tax or legal advice. 

I'd like a witty saying here, but I don't have any. When in doubt, what does the plan document say?

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