Thrift Board Clarifies Rollover Procedures

Washington, DC, January 15, 2002 - The Federal Retirement Thrift Investment Board has notified the Institute that the Thrift Savings Plan (TSP) will begin accepting rollovers from IRAs other than conduit IRAs and from Section 403(b) and 457 plans. On April 1, 2002, Form TSP-60 will be amended to require that TSP participants, rather than the IRA trustee, certify that the distribution is an eligible rollover distribution and contains only tax-deferred balances.

The Institute had submitted a letter to the TSP for federal employees concerning the certification requirement contained in its rollover forms. The Institute’s letter urged the TSP to eliminate this trustee certification requirement, noting that only the IRA owner has the information necessary to provide such a certification. The Institute also noted that, under the "Economic Growth and Tax Relief Reconciliation Act" changes to the Internal Revenue Code that became effective January 1, 2002, an IRA need not qualify as a conduit IRA in order to be eligible for rollover into the TSP. The Institute recommended that the form be revised to provide for certification by the IRA owner that the amounts at issue are eligible for rollover.