San Diego City Employee rolls over 401K and starts 72 T in January 2010. Due to a court case the City wants more money to pay for years of service credit purchased by employee. City willaccept IRA proceeds to pay for time. If we rollover money back to
the City will that cause the 72T calculation to bedisallowed?
2011-08-02 19:48, By: sandiego, IP: [220.127.116.11]
Definitely. Transfers to a different type of retirement plan are not allowed.
Possible solutions to check out:
1) Canthe employeefund the purchase with after tax 72t distributions?
2) Will the city reducethe service credit ifthe employeedeclines to pay in the extra amount?
3)The 72t isonly 19 months old so the total amount of penalty free distributions thatwould be penalizedshould be compared to the benefits for the added service. And if the plan is paying either far too little or too much,
there may be some opportunity to busting it and starting a new one.
2011-08-03 03:44, By: Alan S., IP: [18.104.22.168]