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.
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?