Among other things the IRS has posted IRS Notice 2007-7 which provides guidance on non spousal rollovers of qualified accounts authorized by the Pension Protection Act (PPA). Here are some of the key points I get from the Q&A.

Sec 829 – Non Spouse Beneficiary transfer to inherited IRA

  • Plans are not required to support it! They only to offer it on a non discriminatory basis if they do offer it. So remember to verify each case this might be an issue and not to assume anything.
  • You can’t change the character of distributions by rolling over. So if you have already started on the 5 year distribution rule, the rollover IRA will also be subject to the 5 year distribution rule. This means no additional stretch possible for those who inherited a plan before 2006.