• You have many options when rolling over your pension funds.Transfer of money from hands in hands image by Irina smolina from Fotolia.com
  
  A rollover generally is a tax-free distribution of assets from one qualified retirement plan to another. If you are taking a distribution from a pension plan, which is a form of qualified plan, you have many options as to where you can place the money. However, if you do not closely follow Internal Revenue Service guidelines, your rollover may incur taxes and penalties.
  
  

IRA Rollover

• You can roll your pension into an existing or new Individual Retirement Account (IRA). The easiest, fastest, and safest way to move your funds into an IRA is with a trustee-to-trustee transfer. Technically, this procedure is considered a transfer, not a rollover, but the result is the same; the pension funds are moved to your IRA on a tax-free basis.
  
  

Qualified Plan Rollover

• As with an IRA, you also can generally roll over or transfer your pension funds to another qualified plan, such as a profit sharing plan, money purchase plan, defined benefit plan, or 401(k). Contact the plan administrators at both plans to make sure that they allow rollovers. If so, they will provide you with the necessary paperwork. As long as the money is transferred directly to your new plan, there should not be any adverse tax consequences.
  
  

Rollover Taxes and Penalties

• You can receive a check from your pension plan and deposit it yourself into another plan instead of conducting a direct transfer. However, if you do not redeposit the funds within 60 days of disbursement, the rollover is considered a distribution, and the entire amount is subject to taxes. If you are under 59 1/2, you also will be hit with an early withdrawal penalty of 10 percent. However, if you have a short-term need for funds, and are certain you can replace the money within 60 days, you can use this window to take a short-term loan from your pension plan, without any penalties, taxes, fees, or interest.