The ruling seeks to ameliorate the situation that often arose in which the receiving plan must protect its tax-qualified status by determining that the source of the funds — the former employer’s plan — is also tax-qualified and that the incoming transfer complies with applicable rules. This can make the process complicated, since the new employer’s plan may require participants to obtain a letter or other paperwork from the former employer’s plan — which, in turn, can frustrate participants to such an extent that they may take a distribution instead of making a rollover.
***
John Iekel is Senior Writer at ASPPA, as well as Editor of the ASPPA Net and NTSA Net web portals.
- Log in to post comments