By Sarah Brenner, JD
Director of Retirement Education
Question:
I recently retired in January and rolled over a lump sum pension from my previous employer into my IRA. Next month, I’m planning to roll over my 401(k) from the same employer into the same IRA as well. Would these two actions run afoul of the once-per-year rollover rule? Thanks.
Answer:
Good news! You have nothing to worry about with regard to the once-per-year rollover rule. This rule only applies to 60-day rollovers between traditional IRAs or between Roth IRAs. It does not apply to rollovers from plans to IRAs.
Question:
We have a client who has a SEP IRA plan for their small business. They are having difficulty making SEP IRA contributions for eligible employees. They are under the impression that if they send notification to employees but don’t hear back, they would not have to worry about funding the SEP IRA. Is this correct?
Answer:
Unfortunately, it is not that easy. The rules say that any employee who is eligible to receive a SEP contribution must get one. Under the regulations, an employer is even allowed to establish a SEP IRA on behalf of an employee if the employee is unable or unwilling to do so.
If you have technical questions you would like to have answered, be sure to submit them to [email protected], to be answered on an upcoming Slott Report Mailbag, published every Thursday.
https://irahelp.com/the-once-per-year-rollover-rule-and-sep-contributions-todays-slott-report-mailbag/