Rev. Rul. 2002-45 addresses restorative payments to defined contribution plans and describes a fact-and-circumstances test for determining if the payment is a restorative payment. In various Private Letter Rulings the IRS has also applied Rev. Rul. 2002-45 to IRAs. What's not clear is if the restorative payment can be made to an account different from the one in which the breach of fiduciary responsibility occurred. It seems pretty clear that the restorative payment could be made to the original employer plan in which the breach of fiduciary responsibility occurred and then, if permissible, rolled over to another account, but I have been unable to find anything from the IRS suggesting that the restorative payment could be made directly to a different account such as a rollover IRA. Allowing the restorative payment to be deposited into a different account could, in some cases, result in bypassing restrictions on distributions from the original plan, so might not be permitted.
Can the restorative payment be made to the original account where the breach of fiduciary responsibility occurred? If so, the funds could then be rolled over, if permitted.
