Experience and Benefits
Tax-Free Rollovers
Tax free rollover treatment is available for any portion of a lump sum distribution and certain partial distributions of your account balance in a qualified plan (except nondeductible employee contributions) which is deposited into an eligible retirement plan within 60 days of receipt. Section 402(a)(5).
(a) Total Distribution Rollovers. A qualified lump sum distribution, a lump sum distribution upon plan termination, or a distribution of deductible employee contributions may be rolled into any eligible retirement plan, including IRA's and other qualified plans. A partial rollover of a lump sum distribution is permitted, but the balance of the lump sum is not eligible for capital gain or averaging.
(b) Partial Distribution Rollovers. A partial distribution after July 18, 1985, will qualify for tax free rollover treatment provided it constitutes at least 50 percent of your account balance and is not one of a series of periodic payments. However, rollovers of partial distributions may be made only to IRA's, not to other qualified plans. The remaining balance after a rollover of a partial distribution is not eligible for lump sum distribution treatment, but will be eligible for a subsequent tax free rollover upon distribution.
(c) Rollover treatment of a partial distribution must be elected, but no regulations or other guidelines are available. A statement attached to Form 1040 is probably sufficient until further notice.
(d) Qualifying Recipients. Generally, tax free rollovers are available only to you and your surviving spouse upon your death.