direct rollover

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A direct rollover is a transfer of tax-deferred retirement plan money from one plan or custodian to another. In a direct rollover, the funds are made payable to the successor trustee/custodian for the benefit of the participant. The distribution is not taxable to the participant, although a Form 1099-R reporting the transfer will be issued at year-end.

If a participant is required to take a minimum distribution from his/her account (i.e., at age 70 1/2), those funds must be distributed before the direct rollover is made.

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