Covington & Burling Explains Updated Tax Notice for Retirement Plans -

In “Time to Update Tax Notices for Qualified Plans”, Covington & Burling explains that:

“The IRS has updated its model Special Tax Notice (sometimes called a “402(f) Notice”) for certain changes in the law since 2009. Employers should review their Special Tax Notices to incorporate required updates. When a tax-qualified retirement plan allows lump-sum distributions (or installments over fewer than 10 years), the plan must allow the recipient to roll over his or her distribution to an IRA or another employer’s tax-qualified plan. The plan administrator must provide to anyone receiving a distribution a notice–commonly called a “Special Tax Notice” or “402(f) Notice”–that describes the tax consequences of a distribution and the recipient’s rollover rights.”

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