What is a rollover and how is it used?

For TRS purposes, a rollover is:

• a transfer of tax-sheltered funds from an eligible retirement plan directly to TRS (a trustee to trustee transfer),
• a direct rollover of tax-sheltered funds from an eligible retirement plan to TRS,
  
  Or

• a rollover or transfer check that you receive from an eligible retirement plan to pay for TRS contributions or service credit. The payment must be received by TRS no later than 60 days from the day on which you receive the distribution from your financial institution or retirement plan.

A rollover may only be used to pay for the purchase of optional service, reinstatement of terminated service, payment of 2.2 upgrade contributions, or for member Early Retirement Option (ERO) contributions.

Rollover payment may be completed with a check made payable to TRS or a wire transfer from a financial institution or plan to TRS.

What types of rollovers will TRS accept?

We can accept rollover contributions (other than after-tax contributions) from:

• another qualified Section 401(a) or 401(k) or Keogh plan;
• an annuity plan described in Internal Revenue Code (IRC), Section 403(a);
• a tax-sheltered annuity contract described in IRC, Section 403(b);
• an individual retirement account or annuity (IRA) under IRC, Section 408(a) or Section 408(b) that is eligible to be rolled over and would otherwise be included in gross income;
• a Simplified Employee Pensions Plan (SEP) under IRC, Section 408(k);
• a Savings Incentive Match Plan for Employees (Simple IRA) under IRC, Section 408(p), if there has been participation in the plan for at least two years; and
• an eligible deferred compensation plan under IRC, Section 457(b) which is maintained by a state, political subdivision of a state, or any agency or instrumentality of a state or political subdivision of a state.

Additionally, TRS will also accept spousal rollovers of distributions from Section 401(a), 401(k), Keogh, 403(a), 403(b) and 457(b) plans that the member’s deceased spouse participated in or that have been divided by a Qualified Domestic Relations Order.

Roth IRAs are not rollover eligible at this time.

How do I start the rollover process?

To start the rollover process, a member must first establish an accounts receivable for the purchase of optional service credit, to repay a refund, to pay the 2.2 upgrade contribution, or to pay the member Early Retirement Option contribution.

Before initiating a rollover, you must confirm that your plan administrator or custodian will complete and sign the Rollover Certification form, which is required by federal law. Restrictions may apply, especially with IRAs.

The plan administrator or custodian may require a letter of acceptance from TRS. If so, you or the custodian must contact TRS to request the letter.

The amount rolled over cannot exceed the receivable balance(s). If the rollover check is for a larger amount, it will be returned. Please note that TRS cannot accept a rollover as payment for balances that are currently being paid for by a Payroll Deduction Program agreement.

TRS cannot process the payment without a correctly completed Rollover Certification form that provides written confirmation from the transferring plan that the amounts deposited are eligible for rollover treatment. The form must be completed by both the member and the plan administrator or custodian issuing the rollover check to TRS.

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