With the advent of the 401k, SIMPLE, SEP and 403b as retirement plans, many people have multiple accounts with various employers, because they have changed jobs for any number of reasons. One of the problems with this is the duplication of objectives within each account. Having a lot of funds, in several accounts, does not always provide the diversification we aim to achieve. It also makes it very difficult to keep track of your assets, when you have statements coming from multiple brokers and mutual fund companies.
The Pension Protection Act of 2006, which was signed into law on August 17, 2006 was intended to provide a legal framework for defined contribution plans that will enable plan sponsors to improve the effectiveness of their retirement plans and assist participants with increasing their retirement plan assets. One of the highlights of the PPA is the ability of employees to have greater flexibility to rollover workplace savings plans to IRA’s. In general, the PPA allows for direct rollovers of the entire balance of workplace plans into either a Rollover IRA or a ROTH IRA. Previously only the ROTH portion of the workplace plan could be rolled over...
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