

IR-2007-7, Jan. 10, 2007
WASHINGTON — The Treasury Department and the IRS issued a notice today providing extensive guidance on several Pension Protection Act rules relating to distributions from tax-qualified retirement plans.
The guidance addresses many questions on PPA provisions, including:

interest rate assumptions for lump sum distributions
	 


hardship distributions from a 401(k) and similar plans
	 


early distributions from qualified plans to terminated public safety employees
	 


rollovers from qualified plans to IRAs for non-spouse beneficiaries
	 


distributions to pay for health insurance for retired public safety officers
	 


earlier vesting of certain employer contributions
	 


new rules for the notice and consent period for distributions

The notice also clarifies several issues concerning the provision permitting IRA owners age 70 ½ or older to directly transfer tax-free, up to $100,000 per year to an eligible charity. For example, a check from an IRA made payable to an eligible charity but delivered by the IRA holder still qualifies for tax-free treatment. IRAs held on behalf of beneficiaries, as well as IRAs held by the original owners, are eligible to use this provision. Additionally, the $100,000 annual limit applies separately for each spouse of a married couple. If both spouses have IRAs and are at least age 70 ½, the couple can transfer a combined total of $200,000.
Related Item: Notice 2007-7PDF
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