Haw. Code R. § 6-28-11 - Eligible rollover distributions

(a) A distributee who is entitied to a distribution may elect, at the time and in the manner determined by the administrator, to have any portion of an eligible rollover distribution paid directly in a direct rollover to an eligible retirement plan.

(b) "Eligible rollover distribution" means any distribution of all or any portion of a member's benefit, except that an eligible rollover distribution shall not include:

(1) Any distribution that is one of a series of substantially equal periodic payments made no less frequently than annually for the life (or life expectancy) of the distributee or the joint lives (or joint life expectancies) of the distributee and the distributee's beneficiary, or for a specified period often years or more;

(2) Any distribution to the extent such distribution is required under section 401(a)(9) of the Code;

(3) Corrective distributions of contributions that exceed system or tax law limitations; and

(4) Any distributions during a calendar year that are reasonably expected to total less than $200.

(c) 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. However, such portion may be transferred only:

(1) To an individual retirement account described in section 408(a) of the Code or an individual retirement annuity described in section 408(b) of the Code;

(2) For taxable years beginning after December 31, 2001, and before January 1, 2007, to a qualified trust that is part of a defined contribution plan and that agrees to separately account for amounts so transferred (and earnings thereon) including separately accounting for the portion of such distribution which is includible, in gross income, and the portion which is not so includible; or

(3) For taxable years beginning after December 31, 2006, to a qualified trust (defined contribution or defined benefit) or 403(b) annuity contract, provided that the qualified trust or 403(b) annuity contract agrees to separately account for amounts so transferred (and the earnings thereon), including separately accounting for the portion of such distribution which is includible in gross income, and the portion which is not so includible.

(d) In prescribing the manner of making elections with respect to eligible rollover distributions, as described above, the administrator may provide for the uniform application of any restrictions permitted under applicable sections of the Code and Treasury Regulations, including a requirement that a distributee may not elect to make a direct rollover from a single eligible rollover distribution to more than one eligible retirement plan.

(e) The administrator may require a recipient plan to provide a written statement that it will accept the rollover and separately account for the amount rolled over, where required.

(f) Prior to making an eligible rollover distribution, the administrator shall provide the distributee a notice describing the distributee's right to make a direct rollover to an eligible retirement plan and describing the tax consequences that will follow if a direct rollover is not made. The administrator shall issue the notice at least thirty days but no more than one hundred eighty days prior to the date a distribution is made. However, the eligible rollover distribution may be made less than thirty days after the notice is given provided that the administrator informs the distributee that the distributee has the right to a period of at least thirty days after receiving the notice to consider the decision of whether or not to elect an eligible rollover distribution and the distributee, after receiving the notice, affirmatively elects a distribution.

(g) Any taxable amount that is an eligible rollover distribution but that the distributee chooses not to have directly rolled over is subject to twenty per cent income tax withholding. This includes distributions to the distributee that the distributee intends to roll over in a traditional sixty-day rollover transaction.

Notes

Haw. Code R. § 6-28-11

Eff 5/20/05; am and comp APR 06 2012] (Auth: HRS § 88-28; HRS § 88-22.5) (Imp: HRS § 88-22.5)