403b to 403b transfer
With the new regs in place regarding 403bs and non-profits as of 9/25/07, I was wondering if a retired client no longer employed as an educator can do trustee to trustee transfer from either 403b to 403b or 403b to IRA.
With the new regs in place regarding 403bs and non-profits as of 9/25/07, I was wondering if a retired client no longer employed as an educator can do trustee to trustee transfer from either 403b to 403b or 403b to IRA.
Permalink Submitted by Alan Spross on Sat, 2007-10-06 04:30
Yes, those are permitted as long as the plans allow. Att’d summary of transfer changes in the new Regs:
Stricter transfer rules. 403(b) plans will be subject
to transfer rules similar to those that apply to 401(k)
plans. Currently, a 403(b) participant can transfer
some or all of an account balance at any time from an
employer-sponsored vendor to any other vendor, even
one not offered by the participant’s employer (subject
to plan restrictions). Such transfers are called 90-
24 transfers after the IRS revenue ruling that allows
them. Once the new regulations take effect, 90-24
transfers will no longer be allowed. Instead, only two
types of transfers will be allowed: (1) transfers/exchanges
within the same 403(b) plan, among employer-
approved investments, as spelled out in the plan
document, and (2) transfers to another 403(b) plan,
but only if the individual making the transfer is an
employee or former employee of the receiving plan’s
employer/plan sponsor, and the plan documents of
both plans allow for this.
Permalink Submitted by [email protected] on Mon, 2007-10-08 14:49
The school district has no plan document yet. They’ve always just been allowing any and all providers whenever a person wanted to reduce their salary. The district makes no contributions to any of these plans. Does that change things? Also, we should be able to do 403(b) to IRA, correct? This person is retired. But would this be possible if she was still employed?
Permalink Submitted by Alan Spross on Mon, 2007-10-08 21:59
The transfer out should be allowed for a retiree under all circumstances, but for a current employee, they must be age 59.5.
Permalink Submitted by [email protected] on Tue, 2007-10-09 14:44
Thanks…