A US District Court in Tennessee recently ruled that a retirement plan is not required to roll over a participant’s annuity payments into an IRA. In 2008, the plan administrator in this case denied a plan participant’s request that his plan balance be rolled over into an IRA. Following exhaustion of his administrative remedies, the participant filed suit in federal court, arguing that the plan permits him to roll his plan balance into an IRA. The court disagreed, noting that, although the plan terms permit a participant to elect to have “an eligible rollover distribution paid directly to an eligible retirement plan,” the plan also provides that an “eligible rollover distribution” specifically does not include “any distribution that is one of a series of substantially equal periodic payments . . . made for the life . . . of the participant . . . .” Because the participant was receiving his benefits in the form of a monthly annuity, which did not qualify under the plan as an eligible rollover distribution, the court held that the participant is not entitled to have any portion of the distribution paid into an eligible retirement plan. In reaching its decision, the court dismissed the participant’s argument that the plan must provide for a rollover option to qualify as an Internal Revenue Code (IRC) § 401(a) qualified plan. Although IRC §401(a)(31) requires retirement plans to permit rollovers of any lump sum distributions authorized under the plan, the court found that it does not require that a plan distribute benefits in a lump sum so that participants may elect a rollover. The court also dismissed the participant’s claims that the denial of rollover permission was motivated by a financial conflict of interest, and, noting that the plan administrator properly followed the plan’s claims review procedures, including providing written explanations of its determinations, the court dismissed claims that the determinations were arbitrary and capricious. (Scheib v. Retirement Program Plan for Employees of Certain Employers at the U.S. Department of Energy Facilities at Oak Ridge, Tenn., E.D. Tenn. 2010)