Voluntary Direct Transfers Between Plans Sample Clauses
The "Voluntary Direct Transfers Between Plans" clause allows participants to move their assets directly from one retirement or benefit plan to another without taking possession of the funds themselves. In practice, this means that a participant can request their current plan administrator to transfer their account balance directly to another eligible plan, such as rolling over a 401(k) to an IRA. This process helps maintain the tax-deferred status of the funds and simplifies the transfer, reducing the risk of accidental withdrawals or tax penalties, and ensuring compliance with regulatory requirements.
Voluntary Direct Transfers Between Plans. A Participant or Employee shall be able to transfer amounts up to his or her entire benefit between qualified Defined Contribution Plans [other than a direct transfer described in Code Section 401(a)(31)] without regard to whether the Participant’s benefit is immediately distributable or results in the elimination or reduction of Code Section 411(d)(6) protected benefits. Such a transfer does not violate Code Section 411(d)(6) if the following requirements are met:
(a) The plan from which the benefits are transferred must provide that the transfer is conditioned upon a voluntary, fully informed election by the Participant to transfer his or her entire benefit to another qualified Defined Contribution Plan. As an alternative to the transfer, the Participant must be offered the opportunity to retain the Participant’s Code Section 411(d)(6) protected benefits under the Plan [or if the Plan is terminating, to receive any optional form of benefit for which the Participant is eligible under the Plan as required by Code Section 411(d)(6)].
(b) The transferring plan must be the same plan type as the Plan sponsored by the Employer. When benefits are being transferred from a qualified cash or deferred arrangement under Code Section 401(k), the benefits must be transferred to a qualified cash or deferred arrangement under Code Section 401(k). Money purchase pension plans must be transferred to money purchase pension plans. Benefits transferred from a profit-sharing plan other than a 401(k) plan or employee stock ownership plan may be transferred to any type of Defined Contribution Plan, even if the event is not one that allows a distribution.
(c) This type of elective transfer is only available for transfers made on or after September 6, 2000, even if the transaction or change of employment occurred prior to that date.
(d) If the conditions outlined in (a), (b), and (c) above are met, the Employer’s Plan is not required to protect optional forms of benefits available under the prior plan with respect to any benefit transferred [except as required by the Qualified Joint and Survivor Annuity requirements under Code Sections 401(a)(11) and 417]. Such a transfer is not a protected optional form of benefit, but rather is a “right or feature” under Regulation Section 1.401(a)(4)-4(e).
Voluntary Direct Transfers Between Plans. A Participant or Employee shall be able to transfer his or her entire benefit between qualified Defined Contribution Plans [other than a direct transfer described in Code Section 401(a)(31)] without regard to whether the Participant’s benefit is immediately distributable or results in the elimination or reduction of Code Section 411(d)(6) protected benefits. Such a transfer does not violate Code Section 411(d)(6) if the following requirements are met: