19 Del. Admin. Code § 2006-9.0 - Direct Rollover and Trustee to Trustee Transfers. [Compliance with IRS Code Section 401(a)(31); IRS-approved Language]

9.1 For purposes of compliance with §401(a)(31) of the Internal Revenue Code, this section applies notwithstanding any contrary provision or retirement law that would otherwise limit a distributee's election to make a rollover. A distributee may elect to have any portion of an eligible rollover distribution paid directly to an eligible retirement plan specified by the distributee in a direct rollover from the Pension Fund.

9.2 Eligible rollover distribution: An eligible rollover distribution is any distribution of all or any portion of the balance to the credit of the distributee, except that an eligible rollover distribution does not include:

9.2.1 Any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or the life expectancy) of the distributee or the joint lives (or joint life expectancies) of the distributee and the distributee's designated beneficiary, or for a specified period of ten years or more;

9.2.2 Any distribution to the extent such distribution is required under §401(a)(9) of the Internal Revenue Code of 1986; or

9.2.3 The portion of any distribution that is not includible in gross income, provided, however, a portion of a distribution shall not fail to be an eligible rollover distribution merely because the portion consists of after-tax employee contributions that are not includible in gross income, but such portion may be transferred only:

9.2.3.1 To an individual retirement account or annuity described in §408(a) or (b) of the Internal Revenue Code or to a qualified defined contribution plan described in §401(a) of the Internal Revenue Code that agrees to separately account for amounts so transferred (and earnings thereon), including separately accounting for the portion of the distribution that is includible in gross income and the portion of the distribution that is not so includible;

9.2.3.2 On or after January 1, 2007, to a qualified defined benefit plan described in §401(a) of the Internal Revenue Code or to an annuity contract described in §403(b) of the Internal Revenue Code, that agrees to separately account for amounts so transferred (and earnings thereon), including separately accounting for the portion of the distribution that is includible in gross income and the portion of the distribution that is not so includible; or

9.2.3.3 On or after January 1, 2008, to a Roth IRA described in §408A of the Internal Revenue Code; and

9.2.4 Any other distribution which the Internal Revenue Service does not consider eligible for rollover treatment, such as certain corrective distributions necessary to comply with the provisions of §415 of the Internal Revenue Code or any distribution that is reasonably expected to total less than $200 during the year.

9.3 Eligible retirement plan: An eligible retirement plan is any of the following that accepts the distributee's eligible rollover distribution:

9.3.1 An individual retirement account described in §408(a) of the Internal Revenue Code of 1986;

9.3.2 An individual retirement annuity described in §408(b) of the Internal Revenue Code of 1986;

9.3.3 An annuity plan described in §403(a) of the Internal Revenue Code of 1986;

9.3.4 A qualified trust described in §401(a) of the Internal Revenue Code of 1986;

9.3.5 An annuity contract described in §403(b) of the Internal Revenue Code of 1986;

9.3.6 A plan eligible under §457(b) of the Internal Revenue Code of 1986 that is maintained by a state, political subdivision of a state, or any agency or instrumentality of a state or a political subdivision of a state that agrees to separately account for amounts transferred into the plan from the Pension Fund;

9.3.7 A Roth IRA described in §408A of the Internal Revenue Code of 1986; or

9.3.8 Effective January 1, 2015, a SIMPLE IRA that has been established for at least two years.

9.4 The definition of eligible rollover distribution also includes a distribution to a surviving spouse, or to a spouse or former spouse who is an alternate payee under a domestic relations order, as defined in §414(p) of the Internal Revenue Code of 1986.

9.5 Distributee: A distributee includes an employee or former employee. It also includes the employee's or former employee's surviving spouse and the employee's or former employee's spouse or former spouse who is the alternate payee under a qualified domestic relations order, as defined in §414(p) of the Internal Revenue Code of 1986. Effective July 1, 2007, a distributee further includes a nonspouse beneficiary who is a designated beneficiary as defined by §401(a)(9)(E) of the Internal Revenue Code of 1986. However, a nonspouse beneficiary may rollover the distribution only to an individual retirement account or individual retirement annuity established for the purpose of receiving the distribution and the account or annuity will be treated as an "inherited" individual retirement account or annuity.

9.6 Direct Rollover. A direct rollover is a payment by the Pension Fund to the eligible retirement plan specified by the distributee.

Notes

19 Del. Admin. Code § 2006-9.0

25 DE Reg. 272 (9/1/2021) (final)