Eligible Rollover Distribution

Eligible Rollover Distribution

About Eligible Rollover Distribution:

Eligible Rollover Distribution (erd) is any distribution from a qualified pension or tax-sheltered annuity other than a minimum required distribution or a series of substantially equal periodic pension or annuity payments made over (a) the participant's life (or life expectancy) or (&) a specified period of 10 years or more. The payer of a distribution must withhold at a 20% rate on any ERD that is not rolled over directly to another qualified plan. The recipient is required to contribute an amount equal to the taxable part of the total ERD, including the amount withheld, to a new plan within 60 days from the date of the distribution, or include in taxable income for the year of the distribution any amount withheld for which a matching contribution to the new plan was not made. A recipient can avoid withholding on an ERD by having it directly rolled over from the employer's plan to a qualified plan or individual retirement account. Former IRC (check if this IRC provision is current here) §402(c)(4).






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