What Are the Rules for Rolling a Pension Over to an IRA?


Quick Answer

Rules for rolling a pension over to an IRA include making sure the pension is eligible for a rollover, filling out all necessary forms for a distribution and rolling the pension funds over within 60 days notes Rodgers & Associates. The individual looking to roll his pension over has to be separated from a service, or the company must offer to close the pension plan.

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Full Answer

Rolling a pension plan over to an IRA often can be done either online or over the phone, according to Rodgers & Associates. A person should consult an experienced financial adviser to ensure everything is done correctly. The most efficient way to roll a pension plan over is through a trustee-to-custodian transfer. Depending on the person's marital status, he may need the official signature of his spouse before he can roll his plan over.

A person 55 years old or older can opt for a lump sum distribution rather than roll the plan funds over, without paying a 10 percent excise tax for early withdrawal, notes Rodgers & Associates. There's a chance the individual's employer can roll over a portion of the funds and give the rest to the employee in the form of cash.

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