How do you rollover a pension?

Question

How do you rollover a pension into an IRA? The employer has an annuity option or a lump sum. How can one take the lump sum and roll it over into an IRA without paying taxes? The employer is saying that because it is also considered "profit sharing" that taking the lump sum with cause taxes to be withheld. The employee is 69 years old if that makes any difference.

Answer 1

Check with the company HR and ask what the procedures are to roll the pension to an IRA. They should have some forms or at least instructions.

When I rolled over a 401K into an IRA, I contacted the company who handled the 401K and they took care of setting up the IRA.

As you withdraw the money, you will have to pay income tax.

Answer 2

When I rolled over my retirement on the last job, all I did was get a hold of the compamy with the IRA plan and asked them to rollover the whole amount.

Answer 3

You could also contact the Internal Revenue Service Employee Plans Help-Line, they get questions such as this all the time.

[phone]
http://www.irs.gov/retirement/article/0,,id=96919,00.html
Email: [e-mail]
(For e-mail, IRS responds via telephone so include your number)

Answer 4

At 69, the employee is going to have to start withdrawing soon, or pay a penalty. He/she should be able to take the lump sum without paying taxes at this point, go to someone who sets up IRAs and invest it. I did when I changed jobs and the amount included definite profit-sharing.