Qualified Annuity Payments

Submitted by Kyle Deal on Wed, 2019-09-25 15:42

We have a client who has a qualified annuity that is annuitized and pays out semi-annual payments . Can we take one of these payments and do a 60 day rollover into an IRA?

Similarly they have a Roth annuity that is annuitized and pays out semi-annually. Can we take one of these payments and do a 60 day rollover into a Roth IRA assuming the payment is coordinated with the 60 day period for the qualified annuity disbursement?



Submitted by Alan - IRA critic on Wed, 2019-09-25 17:04

  • SInce the qualified plan is likely annuitized over the life expectancy of the participant or joint lives with a beneficiary, such payments would be treated as RMDs, and therefore cannot be rolled over. 
  • Is the Roth annuity from a designated Roth (qualified plan) account?  If so, because designated Roths are subject to RMDs, this is the same situation as above. However, if the annuitized Roth is a Roth IRA, there are no RMDs and therefore rollovers are permitted. Because only one such 60 day rollover can be done over a 12 month period, an arrangement for direct trustee transfer of the payouts would be needed.
  • Note that the annuitized payments are not treated as 72t plans because they are not calculated using RR 2002-62. Therefore, a rollover would not be disallowed for that particular reason, but would be if the distributions were considered RMDs.


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