Converting old Keogh to rollover IRA

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alphageek42
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Joined: Mon Dec 10, 2018 12:41 pm
Location: Silicon Valley

Converting old Keogh to rollover IRA

Post by alphageek42 »

Many years ago I wrote some software and received royalties from its sale. I declared the royalties as self-employment income on schedule C and shielded some of it by creating a pre-tax Keogh HR-10 money-purchase plan sponsored by a mutual fund company. I have not received any royalties or filed any more schedule Cs since 1988, and I have never added or removed money from the account since then. I have been filing form 5500EZ annually to declare the account balances over the years. The balance is now about $200K.

The mutual fund company on several occasions sent me revisions to the Keogh plan to track changes in tax laws, and I dutifully signed and returned these. However, after the fund company was acquired by another fund group, I suspect that there should have been additional plan updates after 2002, but I stopped receiving plan revisions. Now that I am retired, I wish to terminate the Keogh and move the funds into a rollover IRA. The current custodian is willing to allow this, but I’m concerned about the potential non-compliance of the plan and the consequences if the IRS objects.

Has anyone faced a similar situation? What do you recommend?
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David Jay
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Re: Converting old Keogh to rollover IRA

Post by David Jay »

This document may point you in the right direction: http://www.pension-specialists.com/hott ... eAware.pdf

I note that the last update they mention is 2001.
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Spirit Rider
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Re: Converting old Keogh to rollover IRA

Post by Spirit Rider »

David Jay wrote: Mon Dec 10, 2018 6:28 pm This document may point you in the right direction: http://www.pension-specialists.com/hott ... eAware.pdf

I note that the last update they mention is 2001.
Pay particular attention to the bolded last paragraph. That is very relevant to the OP.

The EGTRRA 2001 restatement period was from May 1, 2008, until April 30, 2010. The PPA 2006 restatement period was from May 1, 2014 until April 30, 2016 which was in accordance with the new 6-year restatement cycle.

OP, if you did not receive, sign and return both restatements, you need to contact your current custodian to get in compliance. I would also ask why they dropped the ball.
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