New Mandatory Rollover Rules Will Apply to Government, Church Plans
(Posted on December 29, 2004 by )

Section 657 of the Economic Growth and Tax Relief Reconciliation Act of 2001 (“EGTRRA”) amended Internal Revenue Code (“Code”) section 401(a)(31) to provide that a distribution from an “eligible plan” of more than $1,000 had to be directly rolled over to an individual retirement account unless a participant affirmatively elected another form of distribution (e.g., to receive the amount in cash). The term “eligible plan” was defined as follows:

a plan which provides that any nonforfeitable accrued benefit for which the present value (as determined under section 411(a)(11)) does not exceed $5,000 shall be immediately distributed to the participant.

The effective date of the provision was tied to the issuance of regulations by the Department of Labor. Thus, the question arose as to whether a plan that was not subject to either Department of Labor regulations or section 411 (a governmental plan or a nonelecting church plan) would be subject to the EGTRRA change. Read more

Fields letter
(Posted on August 20, 1991 by )

Mr. August D. Fields
Godwin, Carlton & Maxwell
NCNB Plaza, Suite 3400
901 Main Street
Dallas, TX 75202-3714

Aug. 20, 1991

Dear Mr. Fields:

This letter is in response to your request for general information, dated June 15, 1991, regarding the application of the limitations of section 415 under the Internal Revenue Code to state and local governmental plans, as defined in section 414(d) of the Code. Read more