Rollovers

Six Reasons Not to Roll Over Your 401(k)
Excerpt:"Just as group medical insurance is generally a better bargain than individual coverage, a group retirement plan can offer advantages investors can't get if they roll the money into an IRA . . . ."(Bankrate.com)

Gay Couples Navigate Steep Retirement Challenges Despite Some Relief
Excerpt:"Since January 2010, employers must let a non-spouse beneficiary, such as a domestic partner, roll inherited retirement savings into an individual retirement account without paying taxes immediately, just as the tax code has allowed spouses to do."(Workforce Management (free registration required))

Legislation Pending to Permit 401(k) Rollovers to Roths for Employees Who Are 59 1/2 Years Old or Older
Excerpt:"According to a draft copy of the bill . . ., it would allow the rollover of amounts in a 401(k) retirement plan of otherwise permissible distributions to a Roth-type account in the same plan."(PLANSPONSOR.com)

[Opinion] ASPPA Comments on Notice 2009-68 ? Safe Harbor Explanation ? Eligible Rollover Distributions
Excerpt:"ASPPA recommends that the guidance and model notices be revised to: Clarify that a single notice may be used for plans that offer both Roth and non-Roth accounts. Clarify that pre-tax amounts in a partial or split rollover can be rolled first to a traditional IRA or qualified plan in accordance with Internal Revenue Code (the'Code') Section 402(c)(2) . . . ."(American Society of Pension Professionals&Actuaries)

IRS Model Rollover Notice Stirs Up Controversy About After-Tax Contributions
Excerpt:"The text in question relates to partial rollovers from plans holding after-tax contributions. IRS insists the language is correct, but discussions with employer groups continue."(Mercer LLC)

[Opinion] American Benefits Council's Follow Up Letter Regarding Interpretive Issue Under Notice 2009-68 Partial Rollovers (PDF)
7 pages. Excerpt:"Thank you for taking the time to meet with the American Benefits Council (Council) and other interested stakeholders to discuss the tax treatment of a partial rollover to an IRA from a plan that includes amounts attributable to aftertax employee contributions."(American Benefits Council)

Generation Y Employees Spending Retirement Distributions at Job Change
Excerpt:"Although this generation's heavy credit-card debt and student-loan burden are factors, part of the blame may lie with communication efforts that fail to resonate with these workers."(Human Resource Executive Online)

[Guidance Overview] Another Question is Answered in the 401(k) Plans Q&A Column
A participant is married and wants a distribution of her accounts. What if she notifies the plan she cannot locate the husband? Alternatively, what if she states she is unable to get spousal consent because he is unreachable due to work location? Or, in the case of battered wife in safe shelter, can the plan request the participant get a court document with provision to update marital status as single? (BenefitsLink.com)

[Guidance Overview] Court Finds Principal not a Fiduciary in Case Involving Rollover of 401(k) Accounts
Excerpt:"A federal district court recently denied class certification in a lawsuit relating to the rollover of funds from 401(k) plans nationwide for which Principal Life Insurance Company provided retirement services. . . . The court rejected plaintiff's argument that Principal could be a fiduciary because it exercised'control'over the disposition of plan assets by inducing the participants to rollover their plan account balances, saying that for Principal to qualify as a fiduciary, the plaintiff would need to establish that Principal, not the participant, controlled the decision to rollover the funds."(PLANSPONSOR.com)

[Guidance Overview] Confusion Regarding Partial Rollovers of After-Tax Contributions
Excerpt:"Whether the IRS will take steps to address the inconsistency between the general administrative practice and its newly clarified position is not certain. The IRS seems to have affirmed its newly clarified position in the recently released Spring 2010 Employee Plans News."(Deloitte via BenefitsLink.com)

[Guidance Overview] What Can't Be Converted to a Roth: 72(t) Payments, Hardship Distributions Among Items Ineligible for Conversion
Excerpt:"The tax code allows only eligible rollover distributions to be converted to Roth individual retirement accounts. That means that besides required minimum distributions, there are a number of other items that can't be converted. These include 72(t) payments, hardship distributions, corrective distributions of excess deferrals, deemed distributions (i.e., defaulted plan loans, though plan loan offsets are eligible for rollover) and dividends from employer securities. In addition, funds in an inherited IRA are not eligible to be converted to a Roth IRA."(Investment News; free registration required)

[Guidance Overview] Court Denies Class Certification, Rejects Arguments that Principal Was a Fiduciary in 401(k) Rollover Lawsuit
Excerpt:"A federal district court recently denied class certification in a lawsuit relating to the rollover of funds from 401(k) plans nationwide for which Principal Life Insurance Company provided retirement services. Walsh v. Principal Life Ins. Co., -- F.Supp.2d. --, 2010 WL 1063738 (S.D. Iowa Mar. 24, 2010). In denying class certification, the court rejected many of the arguments that the plaintiff made in support of her claims that Principal Life and its affiliate, Princor Financial Services Corporation, were acting as ERISA fiduciaries in communicating with plan participants about the rollover of their 401(k) plan account balances into Principal Individual Retirement Accounts ('IRAs')."(Groom Law Group)

Extenders Bill Would Allow for Rollover of Plan Distributions to Roth 401(k) Accounts
Excerpt:"The American Workers, State and Business Relief Bill of 2010 (H.R. 4213), which would extend through 2010 nearly $30 billion in expired tax provisions . . ., would also allow participants in 401(k) plans to roll over distributions to a Roth account maintained under the plan."(Wolters Kluwer)

[Guidance Overview] Allocating'Basis'in Partial and Split Rollovers: Can We Still Rely on Code Section 402(c)(2)? (PDF)
2 pages. Excerpt:"Many plans and third party administrators (TPAs) thought'yes'as well-settled law following EGTRRA, but the Service seems to disagree. . . . Therefore, we continue to recommend a'wait and see'approach prior to making system/plan design changes. And we will continue to encourage the IRS and Treasury to reconsider their position and, in the event their position is firm, to issue prospective, binding authority that express addresses their position and makes it clear that prior transactions are not adversely affected."(Groom Law Group)

[Guidance Overview] Sixty-Day Rollover Requirement Not Applicable to Plan Distribution Check Payable to Second Plan's Sponsor
Excerpt:"A taxpayer's receipt of a check from her former employer's plan that she intended to deposit in her new employer's plan and that was made payable to her new employer for the benefit of the taxpayer was a direct rollover distribution that was not subject to the 60-day rollover requirement of Code Sec. 402(c)(3)(A), according to IRS Letter Ruling 201005057."(Wolters Kluwer)

[Official Guidance] Text of IRS'Employee Plans News'-- Spring 2010 Edition (PDF)
14 pages. Articles include'DOs and DON'Ts for Form 5307 Applications','What Can and Can't Be Rolled Over to a Roth IRA','The Taxable Portion of Your Rollover to a Roth IRA','Distribute Excess Deferrals','Fix-It Guides -- Common Problems, Real Solutions!', Future Requirements for Tax Return Preparers','Multiemployer Funding Issues'and'Calendar of EP Benefits Conferences."(Internal Revenue Service)

BORSAs and ERSOPs and ROBS: Financing Business Start-Ups
Excerpt:"These three acronyms all refer to an arrangement under which a prospective small business owner uses his rollover account to finance a start-up business. BORSA = Business Owner's Retirement Savings Account. ERSOP = Entrepreneur Rollover Stock Ownership Plan. ROBS = Rollover Business Start-ups. The first two acronyms were coined by private vendors who provide assistance to business owners with this type of transaction. The IRS came up with'ROBS'and it is indicative of their perception of these types of arrangements."(Spectrum Pension Consultants, Inc.)

401(k) Plans: What's So Great About Rollovers? Not the Fees
Excerpt:"One sometimes overlooked part of this decision is that once a 401(k) account balance is rolled into an IRA, the IRA owner most likely will pay retail-level fees for investments, such as mutual funds. If the client left the money in the former employer's 401(k) plan, he might pay very low fees or no fees at all."(Tax Management Inc.)

[Guidance Overview] Tax Consequences of Rollovers from Employer Plans to Roth IRAs
Excerpt:"Notice 2009-75, which applies to rollover distributions from qualified plans under IRC ?? 401(a) and 403(b), annuity plans under section 403(a), and eligible governmental plans under section 457(b), supplements regulations under section 408A, which were issued prior to certain legislative changes, and guidance in Notice 2008-30."(American Institute of Certified Public Accountants)

Text of Brief for Secretary of Labor As Amicus Curiae Supporting Defendant-Appellant Matschiner and Requesting Reversal
Excerpt:"The question presented in this case falls within that authority: whether, in light of the decision in Kennedy v. DuPont, 129 S.Ct. 865 (2009), holding that plan administrators must distribute benefits to beneficiaries in accordance with plan documents, ERISA either permits or requires a pension plan administrator to disregard a validly-executed beneficiary designation because the plan lacks a formal procedure through which a designated beneficiary can refuse benefits."(U.S. Department of Labor)

[Official Guidance] Text of Request by EBSA and IRS for Information Regarding Lifetime Income Options for Participants and Beneficiaries in Retirement Plans (PDF)
6 pages. Excerpt:"What are the advantages and disadvantages for participants of selecting lifetime income payments through a plan (in-plan option) as opposed to outside a plan (e.g., after a distribution or rollover)? . . . What are the advantages and disadvantages from the standpoint of the plan sponsor of providing an in-plan option for lifetime income as opposed to leaving to participants the task of securing a lifetime income vehicle after receiving a plan distribution? . . . How commonly do plan sponsors offer participants the explicit choice of using a portion of their account balances to purchase a lifetime annuity, while leaving the rest in the plan or taking it as a lump sum distribution or a series of ad hoc distributions? Why do some plan sponsors make this partial annuity option available while others do not?"(Employee Benefits Security Administration; Internal Revenue Service)

[Guidance Overview] Rollover Chart Updated: Rules As of 2010
Portability chart as of 2010: Rollover to Recipient Plan. (McKay Hochman Co.)

[Guidance Overview] Refresher on Roth: What You Need to Know
Excerpt:"When rolling over assets from a retirement plan into an IRA, a decision on what type of IRA is right needs to be made. Determining the taxability of the rollover may help with this decision. In order to determine the taxability of the rollover, it must be determined what type of money is being rolled into the IRA from the retirement plan, pre-tax or after-tax money. There is an option to roll retirement accounts into a traditional IRA with no tax affects or to a Roth IRA where taxes will apply."(TRI-AD)

[Guidance Overview] IRS Explaination of Requirements for Nonspousal Distributions
Excerpt:"This explanation should be provided to the nonspouse beneficiary no earlier than 180 days and no later than 30 days before making the distribution. Notice 2009-68 contains two sample notices that plans may give to nonspouse beneficiaries."(Wolters Kluwer)

[Guidance Overview] Waiving the 60-Day IRA Rollover Rule
Excerpt:"Under Revenue Procedure 2003-16, taxpayers seeking a waiver must apply for a private letter ruling unless, in an otherwise valid rollover, the lapse is due solely to an error by the depositing financial institution and the funds are deposited into an eligible plan within one year from the beginning of the 60-day period."(American Institute of Certified Public Accountants)

[Official Guidance] ERISA Section 4050 Mortality Rates for 2010 Valuation Dates
Excerpt:"This mortality table is used as part of the'missing participant annuity assumptions'as discussed in 29 CFR 4050."(Pension Benefit Guaranty Corporation)

Using 401(k) Funds for a Business Startup
Excerpt:"The procedure typically involves the creation of a C Corporation by the business owner, then the setup of a retirement plan for its employees, followed by the rollover of the new business owner-employee's 401(k) funds into this new plan, and ultimately the exchange of corporate stock for the funds in the plan. Hence, the acronym ROBS: roll-overs as business startups."(WebCPA.com)

[Guidance Overview] New Tax Rules in 2010 Will Give More People Access to a Roth Individual Retirement Account
Excerpt:"[S]tarting Jan. 1, Uncle Sam will permanently eliminate both the income and filing-status restrictions on transferring money from a traditional IRA to a Roth -- a procedure known as converting. So, anyone willing to pay the income taxes due upon making such a move will be able to funnel retirement savings into a Roth, where it can grow tax-free."(The Wall Street Journal)

[Guidance Overview] New IRS Guidance for Governmental Plans
Excerpt:"The Internal Revenue Service (IRS) recently issued several pieces of guidance relating to rollovers from retirement plans, as well as rules relating to normal retirement ages and required minimum distributions (RMDs) for governmental plans. This Compliance Alert describes the rollover-related guidance and briefly summarizes the rest."(The Segal Group, Inc.)

[Guidance Overview] New Safe Harbor Rollover Explanations and Other Helpful Retirement Plan Guidance
Excerpt:"The Internal Revenue Service (IRS) recently issued several pieces of guidance relating to rollovers from retirement plans and specific design features for individual account plans. This Compliance Alert describes the rollover-related guidance and briefly summarizes the rest."(The Segal Group, Inc.)

[Guidance Overview] November 30, 2009: Deadline for Plan Sponsors to Finalize 2009 Required Minimum Distribution Procedures (PDF)
4 pages. Excerpt:"Under WRERA, if all or a portion of a distribution during 2009 is eligible for a rollover solely because it is no longer an RMD, that portion of the distribution is not treated as an eligible rollover distribution for purposes of the direct rollover rules, including the mandatory 20% income tax withholding and 402(f) notice requirements. However, if a defined contribution plan distributes an amount in 2009 that would have been an RMD in whole or in part but for WRERA, a plan may, but is not required to, offer the participant a direct rollover for the RMD portion. If the plan does not offer a direct rollover of the RMD portion of a 2009 distribution, or if the plan does offer a direct rollover but the recipient receives it in cash, the plan administrator must apply 10% withholding to that portion of the distribution (and give the participant an option to elect no withholding), rather than the mandatory 20% withholding. Additionally, the notice of an eligible rollover distribution does not need to be provided if the distribution is limited to the amount that would have been the 2009 RMD."(Morgan, Lewis&Bockius LLP)

[Guidance Overview] PPA&WRERA Qualified Plan Guidance: Action Items for 2009 (PDF)
6 pages. Excerpt:"Qualified plan amendments or action items required in 2009 relating to the Pension Protection Act of 2006 (PPA) and Worker, Retiree, and Employer Recovery Act of 2008 (WRERA), including; (i) WRERA suspension of 2009 required minimum distributions, with operational compliance required by December 1, 2009, as well as model amendments in Notice 2009-82 which must be adopted by end of 2011 play year; (ii) revised model notices for eligible rollover distributions under Notice 2009-68, which must be put in place by end of 2009 plan year; (iii) sample amendments to add automatic enrollment to plans in Notice 2009-65 needs to be adopted by end of 2009 plan year; (iv) QACA and EACA notices, and qualified default investment alternative notice required at least 30 days in advance of plan year; (v) PPA amendments required by end of 2009 plan year. Also, other recent PPA qualified plan guidance include: (i) rollovers from employer plan or regular IRAs to Roth IRAs have no income limit in 2010, and (ii) contribution of paid time off at end of plan year or on termination of employment permitted."(Charles C. Shulman, Esq.)

[Opinion] American Benefits Council Letter to IRS Regarding Partial Rollovers under Notice 2009-68 (PDF)
4 pages. Excerpt:"The Council is writing to urge the Internal Revenue Service to clarify the treatment of a partial rollover to an IRA of a distribution from a tax-preferred employer plan that includes after-tax contributions. Notice 2009-68, which was published on September 4,2009, updates the safe harbor'402(f) notice,'which describes the tax rules applicable to eligible rollover distributions from employer plans. The updated 402(f) notice includes a description of the tax rules applicable to plan distributions that include after-tax contributions. The description suggests for the first time a distinction in the tax treatment of partial rollovers that turns on whether the rollover is accomplished as a 60-day rollover or a direct rollover. The Council believes that there is no such distinction and urges the Service to clarify the matter."(American Benefits Council)

The Question of Moving 401(k) After-Tax Contributions to a Roth
Excerpt:"A financial newsletter has reported that the IRS has issued a private ruling that after-tax contributions to a 401(k) plan can be pulled out in a lump sum and rolled over to a Roth IRA without triggering income tax. I can find no confirmation of this on the IRS Web site or in any other venue. Can you confirm this? . . . The Internal Revenue Service issued what is known as a private-letter ruling late last year on this subject -- but its scope could be more limited than what the reader describes above, according to Robert S. Keebler, a certified public accountant in Green Bay, Wis."(The Wall Street Journal)

Roth IRA Conversion Confusion Creates Opportunity for Investment Advisors, Study Finds
Excerpt:"The pending rule changes around Roth IRA conversions present a huge business opportunity for financial advisors to have deeper conversations with clients, according to a new survey by Charles Schwab&Co. Inc. Starting January 1, people making more than $100,000 annually will be eligible to convert their traditional individual retirement accounts or 401(k) plans with previous employers into Roth individual retirement accounts. Currently, only those who make less than that amount a year are eligible to convert. However, 61 percent of Americans surveyed by Schwab who made more than $100,000 annually were unaware of the Roth conversion rule changes, while only 14 percent of these 400 individuals said they could explain the rule changes."(Workforce Management; free registration required)

[Official Guidance] IRS'Employee Plans News'- October 2009 Special Edition (PDF)
2 pages; contains hypertext links to the new final funding regulations, and a notice of an upcoming October 28 webcast about the required minimum distribution rules and the new 402(f) notice. (Internal Revenue Service)

[Guidance Overview] IRS Model 402(f) Notice
Excerpt:"Section 402(f) of the Internal Revenue Code (the Code) requires an administrator of a qualified plan and 403(b) arrangement to provide a written explanation prior to the distribution of an'eligible rollover distribution.'Contents of the 402(f) notice must include a description of the direct rollover rules, the participant rollover rules, and the mandatory 20% federal income-tax withholding rules for eligible rollover distributions that are not rolled over. The notice also explains other taxation rules involving distributions and rollovers and has always been a great source of tax information for participants."(McKay Hochman Co., Inc.)

[Guidance Overview] IRS Guidance on Safe Harbor Distribution Notices; Automatic Enrollment/increase Arrangements; Contribution of Unused Paid Time Off to Qualified Plans
Excerpt:"The IRS recently published a myriad of guidance concerning new safe harbor rollover notices, additional information on automatic enrollment/increase arrangements and the contribution of unused paid time off to qualified plans. Here we review the rulings and notices."(JPMorgan Chase&Co.)

[Guidance Overview] IRS's Guidance on Tax Treatment of Rollovers from Employer Plans to Roth IRAs
Excerpt:"The IRS Issued Notice 2009-75, in which they provide guidance on the federal income consequences of rollovers from employer plans[1] to Roth IRAs, primarily net unrealized appreciation (NUA) of employer stocks and income-averaging eligible amounts[i]."(RetirementDictionary!)

Few Savers Plan to Switch to Roth IRA,Survey Says
Excerpt:"Just 7% of survey respondents said they're planning now to convert to a Roth, according to a Fidelity Investments survey in August of 800 people with retirement accounts and household income of $100,000 or higher."(The Wall Street Journal)

401(k) Plans: Policy Changes Could Reduce the Long-term Effects of Leakage on Workers'Retirement Savings (GAO Report)
52 pages. Excerpt:"The incidence and amount of the principal forms of leakage from 401(k) plans -- that is, cashouts of account balances at job separation that are not rolled over into another retirement account, hardship withdrawals, and loans -- have remained relatively steady, with cashouts having the greatest ultimate impact on participants'retirement preparedness. . . . [A] provision requiring plans to suspend contributions to participant accounts for 6 months following a hardship withdrawal may exacerbate the long-term effect of leakage by barring otherwise able participants from contributing to their accounts. GAO also found that some plans are not following current hardship rules, which may result in unnecessary leakage.'A'highlights'report is online at http://www.gao.gov/highlights/d09715high.pdf (U.S. Government Accountability Office)

[Guidance Overview] IRS Guidance on Rollover Notices, Rollovers to Roth IRAs, Automatic Contribution Arrangements and Other Retirement Savings Incentives (PDF)
4 pages. Excerpt:"The IRS recently released three revenue rulings and five notices on provisions intended to spur retirement savings. One notice provides a new model 402(f) notice for eligible rollover distributions upon termination of employment. Another notice provides guidance clarifying the rules for rollovers from qualified plans to Roth IRAs. The other guidance provides sample plan amendments for adding automatic enrollment features to 401(k) plans and SIMPLE IRAs, affirms that default contribution percentages under automatic contribution arrangements may automatically increase as employee compensation increases, and confirms that employees may be allowed to contribute the dollar equivalent of unused paid time off (PTO) into their 401(k), profit-sharing, or stock bonus plans."(Buck Consultants)

[Guidance Overview] Answers to Readers'Questions About New Rules, Starting Jan. 1, Involving Roth Savings Plans
Excerpt:"[Sample question:] I opened a traditional IRA several years ago in anticipation of the 2010 rule changes. None of my IRA contributions were tax-deductible, because my income is too high. And the market meltdown has left the value of my IRA below the amount invested. I assume that for me -- and many others -- a conversion would involve no tax bite whatsoever. True?"(The Wall Street Journal)

[Guidance Overview] IRS's New Versions of Section 402(f) Tax Notices for Qualified Plan Distributions
Excerpt:"The updated safe harbor tax notices explain the tax consequences of the rollover decision, the types of accounts and plans that may receive a rollover, payments that are eligible for rollover, situations in which the 10% early withdrawal penalty may apply, applicable employer withholding obligations, and a number of special rules that may pertain to certain distributees (e.g., individuals whose eligible rollover distribution includes employer stock, beneficiaries of plan participants, resident aliens, etc.)."(Pillsbury Winthrop Shaw Pittman LLP)

[Guidance Overview] IRS's New 402(f) Notices for Eligible Rollover Distributions (PDF)
3 pages. Excerpt:"The new IRS model 402(f) notices may be used beginning immediately. The IRS specifies that to continue to satisfy Code ? 402(f), the model 402(f) notices must be updated to accurately describe current law. This means that plan sponsors or their service providers willneed to periodically review and update the language of the model 402(f) notices where the IRS has not itself published updated model notices. The IRS has indicated that it expects to publish a Spanish translation of the new IRS model 402(f) notices."(Kelly. Hannaford&Battles P.A.)

[Guidance Overview] IRS's Additional Guidance on Tax Consequences of Rollovers from Employer Plans to Roth IRAs
Excerpt:"EBIA Comment: In addition to providing additional guidance on the tax consequences of rolling over ERDs to Roth IRAs, Notice 2009-75 includes helpful background on rollovers of pre-tax funds to Roth IRAs (known as conversion rollovers). Note also that the IRS has released two updated model rollover notices under Code Section 402(f) -- one of which applies only to ERDs from designated Roth accounts. In addition to other changes, both model notices include the updated rollover and taxation rules for rollovers to a Roth IRA . . . ."(Employee Benefits Institute of America)

[Guidance Overview] New Safe Harbor 402(f) Explanations
Excerpt:"Plan administrators are not required to use the safe harbor language, but we generally think it wise to do so to the greatest extent possible. At a minimum, the new safe harbor language serves as a great starting point to ensure that a plan's Section 402(f) explanation reflects the current state of the law. If you have questions regarding the appropriate steps to take with respect to your plan in light of this new guidance, please do not hesitate to contact us. Please also keepin mind that even an explanation including the safe harbor language will need to be modified when relevant law changes. Notice 2009-68 includes an explicit reminder of that fact."(Utz, Miller&Eickman, LLC)

[Guidance Overview] IRS Guidance on Rollovers of Pension Plan Distributions to Roth IRAs
Excerpt:"Notice 2009-75 clarifies that if an eligible rollover distribution from an eligible employer plan is rolled over to a Roth IRA and the distribution is not made from a designated Roth account, then the amount that would be includible in gross income were it not part of a qualified rollover contribution is included in the distributee's gross income for the year of the distribution. The amount included in gross income is equal to the amount rolled over, reduced by the amount of any after-tax contributions that are included in the amount rolled over, in the same manner as if the distribution had been rolled over to a nonRoth IRA and that nonRoth IRA had then been immediately converted to a Roth IRA."(Wolters Kluwer)

[Guidance Overview] IRS Response to President Obama's New Initiative Regarding Retirement Savings
Excerpt:"The Internal Revenue Service ('IRS') has followed up on President Obama's . . . call for more opportunities to save for a'rainy day.'In particular, the IRS guidance relates to: Contribution of the value of unused paid vacation, sick and other leave ('paid time off') to a defined contribution plan; Automatic enrollment arrangements; and Required notice with regard to eligible rollover distributions."(Blank Rome LLP)

[Guidance Overview] IRS Answers to Questions on Taxability of Roth Conversions
Excerpt:"In Notice 2009-75, the Internal Revenue Service provides guidance in the form of a Q&A on the tax treatment of eligible rollover distributions from qualified plans into a Roth IRA. The guidance further clarifies that a qualified plan is a qualified plan described in ? 401(a), an annuity plan described in ? 403(a), a plan described in ?403(b), or a governmental ? 457(b) plan."(PLANSPONSOR.com; free registration required)

[Guidance Overview] IRS's New Safe Harbor Notice Regarding Eligible Rollover Distributions
Excerpt:"On September 5, 2009, the IRS released a substantially restructured and updated safe harbor rollover notice that is required to be provided to people who receive eligible rollover distributions from qualified plans, 403(b) annuities and governmental 457(b) plans. The safe harbor rollover notice provides a more streamlined, simplified explanation of the rollover options available to distributees. The IRS released two separate versions of the safe harbor rollover notice: one for individuals receiving distributions from a designated Roth account and another for individuals receiving distributions that are not from a designated Roth account."(Sonnenschein Nath&Rosenthal LLP)

[Guidance Overview] New IRS Model Rollover Notices
Excerpt:"President Obama has launched a new Retirement and Savings Initiative. As part of this Initiative, the IRS has announced a package of guidance aimed at making it easier to save. Included is an updated safe-harbor rollover explanation. The purpose is to encourage rollovers by providing a clear explanation of the rules."(Warner Norcross&Judd LLP)

[Guidance Overview] Rollovers for Business Start-ups
Excerpt:"The primary purpose of ROBS is to provide the necessary funding to establish a business, with franchises often being the business of choice. The typical individual who makes the ROBS transaction accumulates the funds as an employee under a defined contribution account (or possibly a defined benefit plan with a lump-sum option) under a prior employer's plan. The employee leaves the firm and funds a new business with the tax-deferred distribution of funds from the prior employer's plan. These funds are rolled into the new business's 401(k) or other profit-sharing plan and are used to purchase the new firm's stock. Thus, the new business is capitalized with tax-deferred money, avoiding any taxes that usually apply to a retirement plan withdrawal, ROBS typically exist as a defined contribution profit sharing plan with a 401(k) [cash or deferred arrangement (CODA)]. By the way, the acronym ROBS was created by the IRS."(McKay Hochman Co., Inc.)

[Official Guidance] Text of IRS'Employee Plans News'for Practitioners - Special Edition September 2009 (PDF)
2 pages; provides a brief set of links to the recent IRS notices and rulings. Excerpt from an IRS email:'This special edition discusses the Retirement&Savings Initiatives, Rollovers From Employer Plans to Roth IRAs, the IRS Retirement Plans Navigator and Life Events That Can Affect Retirement Savings."(Internal Revenue Service)

[Official Guidance] Text of IRS'Retirement News for Employers'- Special Edition September 2009 (PDF)
3 pages. Excerpt from an IRS email:'This special edition discusses the Retirement&Savings Initiatives, Rollovers From Employer Plans to Roth IRAs, the IRS Retirement Plans Navigator and Life Events That Can Affect Retirement Savings."(Internal Revenue Service)

[Official Guidance] Text of IRS Notice 2009-75: Rollovers from Employer Plans to Roth IRAs (PDF)
8 pages. Excerpt:"This notice describes the federal income tax consequences of rolling over an eligible rollover distribution from a qualified plan described in ? 401(a) of the Internal Revenue Code (Code), an annuity plan described in ? 403(a), a plan described in ? 403(b), or an eligible governmental plan under ? 457(b) to a Roth IRA described in ? 408A. . . . This notice supplements the regulations under ? 408A and Notice 2008-30 to provide additional guidance on a rollover from an eligible employer plan to a Roth IRA."(Internal Revenue Service)

[Official Guidance] Text of IRS Notice 2009-68: Safe Harbor Participant Notices for Eligible Rollover Distributions (PDF)
25 pages. Excerpt:"This notice contains two safe harbor explanations that may be provided to recipients of eligible rollover distributions from an employer plan in order to satisfy section 402(f) . . . . The first safe harbor explanation applies to a distribution not from a designated Roth account . . . . The second safe harbor explanation applies to a distribution from a designated Roth account. These safe harbor explanations update the safe harbor explanations that were published in Notice 2002-3, 2002- 1 C.B. 289, to reflect changes in the law. These safe harbor explanations also reorganize and simplify the presentation of the information."(Internal Revenue Service)

[Guidance Overview] Eligible Rollover Distributions: List of Transactions Not Eligible for Rollover
Excerpt:"Unemployment Compensation Act of 1992 created Code Section 401(a)(31) which is about direct rollovers and 20% mandatory withholding. Generally, all distributions from qualified plans are eligible for rollover, and if an eligible rollover distribution is paid to a participant it is subject to 20% mandatory withholding. A list of distributions that are not eligible for rollover (and hence not subject to mandatory 20% withholding) was included in the law and has continued to evolve."(McKay Hochman Co., Inc.)

[Opinion] Converting an IRA into a Roth? How's Your Crystal Ball?
Excerpt:"Starting Jan. 1, you'll be able to take a regular I.R.A., say, one that you have in a brokerage account after having rolled an old 401(k) into it, and turn it into a Roth. You'll be able to do this no matter how much money you make, though you'll have to pay income taxes at your current rate on whatever you move. . . . Why would you want to make such a swap? Because you think you or your heirs could end up with more money over the long haul by investing in a Roth instead of a regular I.R.A. . . . It all seems pretty simple, until you consider this: The tax laws might change substantially, throwing all of your careful planning into utter disarray."(The New York Times; free registration required)

[Guidance Overview] Nonspouse Beneficiary Rollover Rules
Excerpt:"The purpose of this article is to provide the rules on nonspouse beneficiary rollovers. To start, we provide a list of the guidance on this subject incorporated into this article."(McKay Hochman Co., Inc.)