I received my distribution rollover check in the mail, processed as I
had requested: a *Roth Conversion* rollover!

Heather

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

Heather <HeatherRain[at]hotmail.com> writes:

- quote -

There are two potential options:
(1) Roll/convert directly from the 401(k) to the RIRA.
(2) Roll to TIRA, then convert to RIRA.

However, it's a difference which makes (virtually) no
difference. In both cases, the money can only go
to the RIRA if your modified AGI is low enough. In both
cases, the money ultimately going into the RIRA will be taxable.

The only thing option (1) gets you is slightly less paperwork.

That's why a plan preventing you from doing (1) is nothing to get
worked up about.

--
Rich Carreiro rlc-news[at]rlcarr.com

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

"Heather" wrote:

- quote -

No, "Making [stuff] Up"

- quote -

The latter, and it's just one 1099-R, from 401(k) to IRA

- quote -

I've always sent a check along with the required paperwork.

--
Phil Marti
Clarksburg, MD

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

<SNIP> Interestingly, I got hold of the Plan Administrator. Her name is
- quote -

The only 2 cents I can add here is that the Plan Summary ALWAYS has
wording that the plan documents
themselves are the authoritative source. And yes, that means even if
the summary has an error of glaring
proportions, they will not honor statements in the plan summary
documents.

It's actually a realistic and good thing that the administrator said
she would have to review. She's probably
the administrator for a number a plans and they're likely all slightly
different. I would expect her to get back to
you, or perhaps someone to whom she's delegated.

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

Phil,

Thanks for such a thorough answer. Also, you gave me a good laugh
when you said, "This makes you want to leave the account there?"
Point well taken! Just a few minor questions now:

On Apr 21, 4:13*pm, "Phil Marti" <prm20...[at]verizon.net> wrote:

- quote -

Is MSU an acronym for MassMutual?

- quote -

The issues are the same? My understanding is that if I roll it to a
TIRA: not a taxable event; if I roll to a RIRA: taxable event. Or are
you saying that they have to issue the same two forms, regardless
(albeit the forms would be filled out differently)? Sorry to be so
dense...

- quote -

Interestingly, I got hold of the Plan Administrator. Her name is
printed in the Plan Summary so Google and voila! There was her
telephone number and email address. (Surprised I could get it - big
company - ADP!) I called her and asked her about the situation.
Although she said she was familiar with the tax changes, she was not
sure of the restrictions of the Plan for which she is
Administrator(!). She said she would have to review the Plan
documents and call me back. She thought that the Plan may dictate to
what type of an IRA a rollover can be made. I mentioned that I had
reviewed my Plan Summary and it does not address these types of
rollovers because it was written prior to 2008. If she has a more
current copy, please send it to me. After our conversation, I
followed up with an email thanking her for her time and assistance. I
wonder if I will ever hear back from her. I think she was quite
surprised to get a call directly from a Plan Participant even though
it says right in the Plan Summary, she is the person to call! (with
no direct contact info, of course - all 800 numbers lead back to
MassMutual, not ADP)
- quote -

How would I go about paying the fees directly? Not that you would
probably know. I guess that will have to be discussed with MassMutual
who I don't have any confidence at all would know how to handle that.

Thanks again, Phil!

Heather

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

"Heather" wrote:

- quote -

That would be my guess. She was probably aiming for "systemically" and
missed.

- quote -

I don't see how she could speak to other IRA custodians' capabilities. That
sounds like MSU.

- quote -

No. The 1099-R the 401(k) issues is the same regardless. They just haven't
figured out how to handle a direct transfer to Roth yet. Remember, you're
dealing with a financial service provider. They tend to move at the pace of
glaciers.

- quote -

See financial service provider above. You're probably going to pay that fee
no matter what you end up doing.

- quote -

I have no idea. I also don't see how the answer to this is of more than
academic interest to you. Let's assume for the sake of argument that they
must. Yet they're telling you they can't. This makes you want to leave the
account there?

- quote -

In order, yes, no and no. If you like you can pay the fee from funds
outside the account. It doesn't count as a contribution. See IRS
Publication 590.

--
Phil Marti
Clarksburg, MD

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

"Heather" <HeatherRain[at]hotmail.com> wrote in message
news:db34c841-fc89-44b3-824e-e68e2a172000[at]w5g2000prd.googlegroups.com...
- quote -


I can say with 100% certainly that the $40.00 fee you pay will be taxable to
Mass Mutual and not you.


- quote -

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

I recently terminated employment and have a 401k account at
MassMutual, the recordkeeper for the Plan. I wish to rollover the
401k to a *Roth* IRA. When I called MassMutual where the 401k is held
to request rollover/distribution forms, the rep told me that they are
not "systematically able" to handle rollovers directly to a Roth IRA.
Even though she was aware of and understands the new tax law
permitting such rollovers, they are not able to "systematically"
handle it. (Not able to process it in their system, I guess?) She
said I would HAVE to roll it to a Traditional IRA FIRST (regardless of
financial instution - theirs, or my own pre-existing account at
another brokerage) and THEN convert it from the Traditional IRA to a
Roth IRA. They are just not set up yet to handle a direct conversion
to a Roth IRA.

Reading between the lines, does that means they are not able to issue
the correct tax documents (5498 and 1099-R)? So they put the burden
on you and your rollover IRA financial institution to do the
conversion and issue the tax documents?

Then, to handle insult to injury, she told me there would be a $40 fee
for closing my account(!) It is absurd to charge me $40 and not even
be able to do what I requested. At that point, I requested to speak
to a manager. After being put on hold, Manager was "unavailable" so
Rep said she would look into it further and call me back tomorrow.
She just remembered that "some" accounts may allow the direct Roth IRA
conversion and she was going to see if mine was one of those.

Questions:

1 - Are employer plans REQUIRED to perform 401k to Roth IRA
Distribution if Requested? Or can they (legally) restrict the type of
account into which you roll the money (despite the new 2006 PPA
provision)?

2 - Can they legally charge a fee for account closure for a qualified
retirement plan? I terminated employment by choice with the company
and have no other outstanding business, loans or anyting else with
them. Do I have any recourse on that? (What a bunch of slimes!) Do
I owe any taxes on such a fee since it was tax-deferred?

Thanks for the help!
Heather

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >