§ 411.6B — Rollovers of members’ accounts

Iowa § 411.6B

• Jurisdiction: Iowa
• Title IX: LOCAL GOVERNMENT
• Ch. 411: RETIREMENT SYSTEM FOR POLICE OFFICERS AND FIRE FIGHTERS

Text

1. As used in this section, unless the context otherwise requires, and to the extent
permitted by the internal revenue service:
a. “Directrollover”meansapaymentbythesystemtotheeligibleretirementplanspecified
by the member or the member’s surviving spouse, or the member’s alternate payee under a
marital property order who is the member’s spouse or former spouse.
b. (1) “Eligible retirement plan” means any of the following that accepts an eligible
rollover distribution from a member, a member’s surviving spouse, or a member’s alternate
payee:
(a) An individual retirement account in accordance with section 408(a) of the federal
Internal Revenue Code.
(b) An individual retirement annuity in accordance with section 408(b) of the federal
Internal Revenue Code.
(2) In addition, an “eligible retirement plan” includes an annuity plan in accordance
with section 403(a) of the federal Internal Revenue Code, or a qualified trust in accordance
with section 401(a) of the federal Internal Revenue Code, that accepts an eligible rollover
distribution from a member. Effective January 1, 2002, the term “eligible retirement plan”
also includes an annuity contract described in section 403(b) of the federal Internal Revenue
§411.6B, RETIREMENT SYSTEM FOR POLICE OFFICERS AND FIRE FIGHTERS 18
Code, and an eligible plan under section 457(b) of the federal Internal Revenue Code which
is maintained by a state, political subdivision of a state, or any agency or instrumentality
of a state or political subdivision of a state that chooses to separately account for amounts
rolled over into such eligible retirement plan from the system.
c. “Eligible rollover distribution” means all or any portion of a member’s account, except
that an eligible rollover distribution does not include any of the following:
(1) A distribution that is one of a series of substantially equal periodic payments, which
occur annually or more frequently, made for the life or life expectancy of the distributee or
the joint lives or joint life expectancies of the distributee and the distributee’s designated
beneficiary, or made for a specified period of ten years or more.
(2) A distribution to the extent that the distribution is required pursuant to section
401(a)(9) of the federal Internal Revenue Code.
(3) The portion of any distribution that is not includible in the gross income of the
distributee, determined without regard to the exclusion for net unrealized appreciation
with respect to employer securities. Provided, however, that effective January 1, 2002, such
distributions may be directly rolled over to an individual retirement account described in
federal Internal Revenue Code section 408(a) or 408(b), a qualified defined contribution
plan described in federal Internal Revenue Code section 401(a), or a qualified annuity plan
described in federal Internal Revenue Code section 403(a), if such plan agrees to separately
account for the after-tax amount so rolled over.
(4) A distribution of less than two hundred dollars of taxable income.
2. Effective January 1, 1993, a member or a member’s surviving spouse may elect, at the
time and in the manner prescribed in rules adopted by the board of trustees, to have the
system pay all or a portion of an eligible rollover distribution directly to an eligible retirement
plan, specified by the member or the member’s surviving spouse, in a direct rollover. If a
member or a member’s surviving spouse elects a partial direct rollover, the amount of funds
elected for the partial direct rollover must equal or exceed five hundred dollars.
3. a. For distributions after December 31, 2009, a nonspouse beneficiary who is a
designated beneficiary may roll over all or any portion of the beneficiary’s distribution
to an individual retirement account the beneficiary establishes for purposes of receiving
the distribution by means of a direct rollover. In order to qualify for a rollover under this
subsection, the distribution must otherwise satisfy the definition of an eligible rollover
distribution. If a nonspouse beneficiary receives a distribution from the system, the
distribution is not eligible for a sixty-day rollover.
b. If the member’s named beneficiary is a trust, the system may make a direct rollover
to an individual retirement account on behalf of the trust, provided the trust satisfies the
requirements to be a designated beneficiary within the meaning of Internal Revenue Code
section 401(a)(9)(E).
c. A nonspouse beneficiary may not roll over an amount which is a required minimum
distribution, as determined under applicable United States treasury regulations and other
federal Internal Revenue Service guidance. If the participant dies before the participant’s
required beginning date and the nonspouse beneficiary rolls over to an individual retirement
account the maximum amount eligible for rollover, the beneficiary may elect to use either
the five-year rule or the life expectancy rule, pursuant to applicable United States treasury
regulations as provided in 26 C.F.R. §1.401(a)(9)-3, in determining the required minimum
distributionsfromtheindividualretirementaccountthatreceivesthenonspousebeneficiary’s
distribution.