10/29/2014

Moving Retirement Plan Assets in 2015? Exercise Caution

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The IRS has announced that “beginning as early as January 1, 2015, you can make only one rollover from an IRA to another (or the same) IRA in any 12-month period, regardless of the number of IRAs you own”.

There are some terms to be familiar with here:

  • Rollover – in the context used here, this means that you have “constructive receipt” of assets from a retirement plan – i.e. they come into your possession.  You then have 60 days to complete a rollover into your IRA account.
  • Trustee-to-trustee transfer – assets from your retirement plan account are sent directly from the current trustee for your plan to the trustee for your IRA account, without coming into your possession.

Beginning January 1, 2015, an IRA participant will be allowed only one rollover in any 12-month or 365-day period.  This applies across all IRAs (Traditional, Rollover, Roth, SEP, SARSEP and SIMPLE IRAs).

As an alternative, a participant can make an unlimited number of trustee-to-trustee transfers where assets are delivered directly to the new trustee.

You are likely to receive information on this new restriction from a number of sources, including a mailing from the shareholder servicing agent of Aquila Group of Funds, BNY.

Please discuss your options with your professional tax adviser before you move a retirement plan account, and visit the IRS web site for details regarding the IRS IRA One Rollover Per Year Rule.