3.5. Rollovers vs. Transfers

Sometimes a qualified retirement plan participant may want to roll over or transfer the assets in her current plan to another qualified plan or to an IRA. Rollovers and transfers differ both procedurally and in their tax consequences.

A rollover is when an individual wants to take her retirement plan account funds to a new investment entity. This usually occurs when an employee leaves one job and takes her pension or accumulated account in one lump sum when she leaves. Rollovers are allowed no more than once a year.

The IRS gives account holders 60 days to complete a rollover. For company-managed qualified plans, the company