La. Admin. Code tit. 58 § III-1515

Current through Register Vol. 50, No. 9, September 20, 2024

Section III-1515 - Rollover Distribution

A. For purposes of this Section, the following definitions shall apply.

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

Distributee-includes a participant or former participant. It also includes the participant's or former participant's surviving spouse and the employee's or former employee's spouse or former spouse who is the alternate payee under a domestic relations order. It also includes the participant's or former participant's nonspouse beneficiary who is a designated beneficiary as defined by IRC §401(a)(9)(E) Effective January 1, 2007, and notwithstanding anything in the plan to the contrary that otherwise would limit a distributee's election under this Section, and to the extent allowed under the applicable provisions of the IRC and the treasury regulations, a distributee who is a designated beneficiary, but not a surviving spouse, spouse or former spouse alternate payee may elect, at the time and in the manner prescribed by the plan administrator, to have all or any part of the account that qualifies as an eligible rollover distribution paid in a direct trustee-to-trustee transfer to an eligible retirement plan that is an individual retirement plan described in Clause (i) or (ii) of the IRC §402(c)(8)(B) If such a transfer is made:

a. the transfer shall be treated as an eligible rollover distribution;

b. the individual retirement plan shall be treated as an inherited individual retirement account or individual retirement annuity (within the meaning of IRC §408(d)(3)(C); and

c. IRC §401(a)(9)(B) (other than clause (iv) thereof) shall apply to such individual retirement plans.

Eligible Retirement Plan-any program defined in IRC §§401(a)(31) and 402(c)(8)(B), that accepts the distributee's eligible rollover distribution, and any of the following:

a. an individual retirement account under IRC §408(a);

b. an individual retirement annuity under IRC §408(b);

c. a qualified trust as described in IRC §401(a), provided that such trust accepts the employee's eligible rollover distribution;

d. an annuity plan as described in IRC §403(a);

e. an eligible deferred compensation plan described in IRC §457(b) which is maintained by an eligible governmental employer under IRC §457(e)(1)(A) (provided the plan contains provisions to account separately for amounts transferred into such plan);

f an annuity contract under IRC §403(b); or

g. a Roth IRA as described under IRC §408A. Eligible Rollover Distribution-

h. effective December 18, 2015, a simple IRA as described under IRC §408(p), provided that the rollover contribution is made after the two-year period described in IRC §72(t)(6)

Eligible Rollover Distribution-

a. the distribution of all or any portion of the balance to the credit of an employee from a qualified plan, except that an eligible rollover distribution does not include:

i. 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) of the participant and the participant's designated beneficiary, or for a specified period of 10 years or more;

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

iii. the portion of any distribution that is not includible in gross income, provided that any portion of any distribution that is not includible in gross income may be an eligible rollover distribution for purposes of a rollover to either:

(a). a traditional individual retirement account or individual retirement annuity under IRC §408(a) or 408(b); or

(b). a qualified trust which is part of a plan which is a defined contribution plan or a defined benefit under IRC §401(a) or to an annuity contract described in IRC §403(b), and such trust or annuity contract separately accounts for amounts so transferred, including separate accounting for the portion of such distribution that is includible in gross income and the portion of such distribution that is not includible.

b. a qualified rollover contribution to a Roth IRA within the meaning of IRC §408A.

B. Consistent with IRC §401(a)(31), for any distribution that is an eligible rollover distribution, the distributee may elect, at the time and in the manner prescribed by the ORP provider, to instruct the ORP provider to have any portion of an eligible rollover distribution paid directly to an eligible retirement plan specified by the distributee. The ORP provider shall provide written information to the distributee regarding eligible rollover distributions no more than 180 days prior to payment of the eligible rollover distribution, to the extent required by IRC §402(f)

C. A current employee in the TRSL who elects participation in the plan shall have the right to have his or her accumulated employee contributions transferred to the plan to purchase benefits thereunder in accordance with R.S. 11:926. A current vested employee in the TRSL or an employee with sufficient years of service credit but who is not old enough to receive a benefit and who elects participation in the plan will have the same rights and privileges accorded by R.S. 11:726.

D. The ORP provider may (but is not required to) commence the distribution less than 30 days after giving an eligible rollover distribution notice only if the following requirements are met. To the extent required by IRC §402(f) and treasury reg. §1. 402(c)-2, the ORP provider must inform the distributee in an eligible rollover distribution notice or otherwise that the distributee has a right to a period of at least 30 days after receiving the eligible rollover distribution notice to consider the decision of whether to elect a distribution and any available payout option, and the distributee after receiving the eligible rollover distribution notice must affirmatively elect a distribution.

La. Admin. Code tit. 58, § III-1515

Promulgated by the Department of the Treasury, Board of Trustees of the Teachers' Retirement System of Louisiana, LR 402277 (11/1/2014), Amended LR 471904 (12/1/2021).

AUTHORITY NOTE: Promulgated in accordance with R.S. 11:921-929.