Diagnosis
The nature of a retirement plan can either be "Regular", "Conduit" or"Inherited".
A "Regular" retirement plan is most commonly used.
A "Conduit" retirement plan is a holding tank for funds that originallycame from a Qualified plan (e.g. a 401k plan) and are (or may be)on their way to another Qualified plan. This situation can occur, forinstance, when a customer changes his/her job. If the funds in a"Conduit" retirement plan is commingled with the funds of any othertype of retirement funds, the funds in the "Conduit" retirement plancan no longer be rolled to another Qualified plan.
An "Inherited" retirement plan can be created for the beneficiaries ofa deceased accountholder. By setting up an "Inherited" retirement plan,a seperation can be made between the funds a beneficiary has in his/heroriginal retirement plan and the funds he/she inherites. In most casesthe funds in an "Inherited" retirement plan are subject to a mandatorydistribution. The only exception is if the sole beneficiary isthe spouse of the deceased accountholder and theaccountholder died before the mandatory distribution date.