Are active general member lump-sum death benefits eligible for a tax-deferred rollover to a traditional IRA or eligible employer plan?
In most cases, yes.* Benefit rollovers postpone taxation of the benefit until it is paid to you. However, individuals who reach age 70.5 on or before December 31 in the year the benefit is disbursed are not eligible to roll over their death benefit. California residents are subject to state income tax on the benefit. Information on the taxability of payments from qualified employer plans (such as LACERA’s) is available in IRS Publication 575, Pension and Annuity Income, and IRS Publication 590, Individual Retirement Arrangements. These publications are available from your local IRS office, on irs.gov, or by calling 1-800-TAX-FORMS. For questions regarding your personal situation, consult with a professional advisor; LACERA does not offer legal or tax advice. *In certain cases, a portion of the benefit may not be taxable. LACERA will notify you of the taxable portion of the benefit.
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