Good News For Employers: IRS Simplifies Rollover Validation Process

To simplify the rollover validation process, the Internal Revenue Service (IRS) has issued a new Revenue Ruling 2014-9 that provides guidance on the process for a trustee-to-trustee tax-free rollover between tax-qualified employer retirement plans. When new employees are hired, they will often roll over their retirement plan funds to a plan sponsored by their new employer. For the employee, the rollover is helpful because it allows the employee to continue the tax deferral of his or her retirement funds. For the new employer, the rollover can be a recruiting tool, while also increasing the size of plan assets. However, the new employer, usually acting as the legal plan administrator, must "reasonably conclude" that the rollover contribution is valid.