Retirement Chapter 9: Distribution Rules, Alternatives, and Taxation

Question 1

Can in-service withdrawals be made by those who have reached 59.5 or by participants who have a financial hardship regardless of age?

Answer 1

Yes

Question 2

What kind of plans are required to have QPSA and QJSA death benefits?

Answer 2

Pension plans (money purchase, target benefit), profit-sharing plans are not required

Question 3

What is the penalty tax on premature SIMPLE distribution?

Answer 3

25%

Question 4

SIMPLE–>qualified plans and IRAs

Answer 4

Rollover is allowable only if the SIMPLE had been maintained for 2 years from its start date

Question 5

Do 401(k) plan distributions (a “qualified 60 day”) count as a 60-day IRA distribution?

Answer 5

No

Question 6

When can a governmental 457 account balance be rolled into an IRA?

Answer 6

70.5 or separation from service

Question 7

How are conduit IRAs used?

Answer 7

A conduit IRA holds the funds that have been distributed from a qualified plan until it can be deposited to another qualified plan.

Question 8

Are 457s subject to mandatory withholding rules?

Answer 8

No because they are not qualified plans

Question 9

For IRAs, SEPs, and SIMPLEs, the RBD is…

Answer 9

4/1 of the year following the year when the taxpayer turns 73