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Compliance February 17, 2005
IRS Reminds Plan Administrators of Automatic Rollover Deadline
February 17, 2005 (PLANSPONSOR.com) - The IRS has
reminded plan administrators that amendments to comply with
new automatic rollover rules must be adopted by the end of
the first plan year on or after March 28.
Reported by Kip McDaniel
>In an edition of the IRS Employee Plan News, the agency advised employers that plan amendments regarding the rollover rules must be adopted by the deadline, according to BNA.
The new automatic rule requires the mandatory distributions of more than $1,000 from a qualified retirement plan be rolled over into a individual retirement account (IRA) unless the participant opts for another plan to be used (See DoL Releases EGTRRA IRA Rollover Rule ).
Some examples of guidance issued on the subject in the past months include:
- automatic rollover requirements apply to governmental and church plans, although a transition rule is provided for these plans to comply.
- all plans have until the end of 2005 to establish administrative procedures for processing the rollovers
- rollover IRAs can be set up without a plan participants’ permission.
The complete guidance document is available here .
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