La. Admin. Code tit. 32 § VII-723

Current through Register Vol. 50, No. 8, August 20, 2024

Section VII-723 - Eligible Rollover Distributions

A. General. Notwithstanding any provision of the plan to the contrary that would otherwise limit a distributee's election under this §723, a distributee may elect, at the time and in the manner prescribed by the employer, to have any portion of an eligible rollover distribution paid directly to an eligible retirement plan specified by the distributee in a direct rollover.

B. Notice. The commission shall, within a reasonable period of time before making an eligible rollover distribution, provide a written explanation to the distributee explaining the following, as amended from time to time by applicable changes to the law:

1. the provisions under which the distributee may have the distribution directly transferred to an eligible retirement plan and that the automatic distribution by direct transfer applies to certain distributions in accordance with § 401(a)(31)(B) of the Internal Revenue Code;

2. the provision which requires the withholding of tax on the distribution if it is not directly transferred to an eligible retirement plan;

3. the provisions under which the distribution will not be subject to tax if transferred to an eligible retirement plan within 60 days after the date on which the recipient received the distribution;

4. the provisions under which distributions from the eligible retirement plan receiving the distribution may be subject to restrictions and tax consequences which are different from those applicable to distributions from the plan making such distribution.

C. Definitions. For purposes of this §723, the following definitions shall apply.

Direct Rollover-a payment by the plan to the eligible retirement plan specified by the distributee.

Distributee-includes an employee or former employee, the employee's or former employee's surviving spouse and the employee's or former employee's spouse or former spouse who is the alternate payee under a qualified domestic relations order, as defined in IRC §414(p), are distributees with regard to the interest of the spouse or former spouse.

Eligible Retirement Plan-an eligible retirement plan is an individual retirement account described in IRC §408(a), an individual retirement annuity described in IRC §408(b), an annuity plan described in IRC §403(a) that accepts the distributee's eligible rollover distribution, a qualified trust described in IRC §401(a) (including §401(k)) that accepts the distributee's eligible rollover distribution, a tax-sheltered annuity described in IRC §403(b) that accepts the distributee's eligible rollover distribution, or another eligible deferred compensation plan described in IRC §457(b) that accepts the distributee's eligible rollover distribution. However, in the case of an eligible rollover distribution to the surviving spouse, an eligible retirement plan is an individual retirement account or individual retirement annuity.

Eligible Rollover Distribution-any distribution of all or any portion of the balance to the credit of the distribute, except that an eligible rollover distribution does not include any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the distributee or the joint lives (or joint life expectancies and the distributee's designated beneficiary, or for:

a. a specified period of 10 years or more;

b. any distribution to the extent such distribution is required under IRC §401(a)(9);

c. any distribution that is a deemed distribution under the provisions of IRC §72(p);

d. the portion of any distribution that is not includable in gross income; and

e. any hardship distribution or distribution on account of unforeseeable emergency.

Reasonable Period of Time -shall have the meaning assigned to it under § 401(a)(31) of the Internal Revenue Code and the regulations thereunder.

La. Admin. Code tit. 32, § VII-723

Promulgated by the Department of the Treasury, Deferred Compensation Commission, LR 24:1969 (October 1998), amended LR 28:1499 (June 2002), LR 32:123 (January 2006), LR 37:1621 (June 2011).

AUTHORITY NOTE: Promulgated in accordance with R.S. 42:1301-1308 and IRC §457.