Isn't a pension safer in a 401K plan rather than a rollover IRA if my state only shields IRAs, say up to $50,000?
From a protection viewpoint, that’s true. But it’s not necessarily
true from an investment viewpoint. If you question the safety of your
IRA under your state law, then it’s safer not to rollover your pension
into a self-directed IRA. Rolling over your ERISA-qualified funds to a
self-directed IRA that your state doesn't fully protect reduces or
eliminates your protection. Of course, you can’t always keep retirement
accounts in an employer’s 401K plan. Or you may want to self-direct
your IRA investments. The 'rollover' decision should primarily
be an investment issue, but do consider asset protection. Also remember
that the million-dollar exemption for IRAs doesn’t include rollovers.
And the exemption applies only in bankruptcy. If you’re not in bankruptcy,
and your state doesn’t fully protect your IRA, you can lose the
unprotected portion of your IRA – including rollovers.