When is a Net Unrealized Appreciation (NUA) strategy favorable?
For participants who own employer stock that has grown in value from their original cost, it may be beneficial to adopt a NUA strategy for the employer stock. From a tax perspective, it is generally more favorable for participants to roll over retirement plan assets to an IRA or new employer-sponsored plan rather than take a lump–sum distribution. For participants who have large amounts of appreciated company stock, however, it may be more beneficial to take a lump–sum distribution of company stock instead. Consult your tax advisor for more information.
