Series 22: 5.2.3. Rollovers Vs. Transfers

 5.2.3.  Rollovers vs. Transfers

Sometimes qualified retirement plan participants may want to rollover or transfer the assets in a current plan to another qualified plan or to an IRA. Rollovers and transfers differ both procedurally and in their tax consequences.

A rollover is when the individual wants to take the retirement plan account funds to a new investment entity. This usually occurs when an employee leaves one job and takes his pension or accumulated account in one lump sum when he leaves. Rollovers are allowed no more than once a year.

The IRS gives account holders 60 days to complete the rollover. For company-managed qualified plans, the company must withhold 20% of the distribution as a wi