July 2000


Recently released final regulations under section 401(a)(31) grant relief from disqualification to plans that accidentally accept an invalid rollover contribution, provided that two specific conditions are met:

* The plan administrator of the receiving plan must reasonably determine when accepting the contribution that it is a valid rollover contribution. It is not necessary for the distributing plan to have received a determination letter in order for the plan administrator of the receiving plan to make a reasonable determination that the rollover was valid.

* If the plan administrator later concludes that the contribution was invalid, the plan must distribute the contribution and earnings to the employee within a reasonable period of time.

If the plan administrator meets these two conditions, the invalid rollover is treated as a valid rollover for purposes of applying the qualification requirements of sections 401(a) or 403(a). *

Home | Contact | Subscribe | Advertise | Archives | NYSSCPA | About The CPA Journal

The CPA Journal is broadly recognized as an outstanding, technical-refereed publication aimed at public practitioners, management, educators, and other accounting professionals. It is edited by CPAs for CPAs. Our goal is to provide CPAs and other accounting professionals with the information and news to enable them to be successful accountants, managers, and executives in today's practice environments.

©2009 The New York State Society of CPAs. Legal Notices

Visit the new cpajournal.com.