Tip of the Week: Who Is Eligible to Roll Over Distributions?

Editor’s Note: This is an occasional feature in the NTSA Advisor. It is drawn from The Source, a book that covers technical, compliance, administrative and marketing aspects of the 403(b) and 457(b) markets. More information about The Source is available here.

The following is a list of persons eligible for rollover distributions:

• Participants in retirement plans and owners of IRAs are eligible to roll over most distributions from one plan type or account to another plan type or account.
• A spousal beneficiary of the deceased’s retirement plan or IRA are eligible to roll over the death benefit either to the spouse’s own “workplace plan” or to an IRA.
• Non-spousal beneficiaries receiving distributions made after January 1, 2007 are eligible to rollover the death benefit distribution from a qualified plan (including 401(a), 401(k), governmental 457(b) and 403(b) plans) to an inherited IRA as permitted by the Pension Protection Act of 2006 but only as a “direct rollover.” Non-spouse beneficiaries may not do a 60-day rollover. Effective January 1, 2010, this permitted direct rollover by a nonspouse beneficiary became a requirement for employers to offer under their plan. Prior to January 1, 2010, this was an optional provision only.