4000 / What is an eligible retirement plan for purposes of the rollover rules?

The definition of “eligible retirement plan” depends on the plan from which a rollover is made. The availability of rollovers between various types of plans was considerably expanded by EGTRRA 2001.

An eligible retirement plan with respect to a distribution from a qualified plan means an IRA, another qualified plan, a Section 403(a) annuity, a Section 403(b) tax sheltered annuity, and an eligible Section 457 governmental plan (provided it agrees to separately account for funds received from any eligible retirement plan except another eligible Section 457 governmental plan).¹ For taxpayers wishing to preserve any capital gains or special averaging treatment ( Q 3971), a distribution can be made to a conduit IRA and rolled back to another qualified plan. For this purpose, money from a qualified plan may not be commingled with other money ( Q 4008).

Non-Roth IRAs (traditional, SEP, and SIMPLE). An eligible retirement plan with respect to a distribution from a non-Roth IRA (an individual retirement account or an individual retirement annuity) means an IRA, a qualified plan, a Section 403(a) annuity, an eligible Section 457 governmental plan (provided it agrees to separately account for funds received from any eligible retirement plan except another eligible Section 457 governmental plan), and a Section 403(b) tax sheltered annuity ( Q 4008).² Amounts paid or distributed out of a SIMPLE IRA during the first two years of participation may be rolled over only to another SIMPLE IRA.³ Prior to 2016, the only rollover permitted to a SIMPLE IRA was from another SIMPLE IRA. The PATH Act removed this restriction so that amounts from other types of retirement plans may be rolled into a SIMPLE IRA so long as the plan has existed for at least two years.

Roth IRAs. A distribution from a Roth IRA generally can be rolled over only to another Roth IRA. A rollover or conversion from a non-Roth IRA or other retirement plan into a Roth IRA generally is a taxable event ( Q 3662).⁴

Section 403(b) annuity. An eligible retirement plan with respect to a distribution from a Section 403(b) tax sheltered annuity includes a non-Roth IRA, a qualified plan, a Section 403(a) annuity, an eligible Section 457 governmental plan (provided it agrees to separately account for funds received from any eligible retirement plan except another eligible Section 457 governmental plan), and another Section 403(b) annuity.⁵

Eligible Section 457 governmental plan. An eligible retirement plan with respect to a distribution from an eligible Section 457 governmental plan includes a non-Roth IRA, a qualified plan, a Section 403(a) annuity, another eligible Section 457 governmental plan and a Section 403(b) annuity.⁶

See Q 3999 for the new rules that allow a taxpayer to roll pre-tax and after-tax contributions into separate accounts in a single distribution.