Defined Benefit Plan Rollover to 401(k)

Written by True Tamplin, BSc, CEPF®

Reviewed by Subject Matter Experts

Updated on March 29, 2023

A rollover from a defined benefit plan to a 401(k) plan is just like any other type of rollover.

When you leave an employer that offers a defined benefit plan, or you work for an employer that terminates its defined benefit plan, then you will be eligible to roll your plan over into an IRA or another employer-sponsored retirement plan such as a 401(k) plan.

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401(k) Rollover Requirements

Some defined benefit plans will allow you to roll your whole plan balance over at once, while others require you to move your plan balance over in segments.

The larger the plan you have, the smaller the chance that you'll be able to roll over your entire balance at once.

Any amount of your defined benefit plan that is to be used for required minimum distributions cannot be rolled over.

Your plan will inform you at the time of separation or termination what your rollover options are.

401(k) Rollover Taxes

If you made after-tax contributions to your defined benefit plan, then you will need to keep track of that money and keep it separate from the rest of your plan that was funded with pretax money so that it doesn't get taxed twice.

And, of course, the 401(k) plan that is receiving your defined benefit plan balance must allow for rollovers from other plans (and most of them do).

You can also roll your defined benefit plan into a Roth 401(k) if you choose, but you'll have to pay taxes on the rollover amount at the time of distribution.

Defined Benefit Plan Rollover to 401(k) FAQs

About the Author

True Tamplin, BSc, CEPF®

True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.

True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website, view his author profile on Amazon, or check out his speaker profile on the CFA Institute website.

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