Rollover of 403B plan upon termination.
I have a physician client that participates in a 403B and 457 plan with his employer. The employer is switching the 403b plan from VALIC to Lincoln Financial. My client is being told that he cannot rollover the 403b to an IRA because the IRS indicates that this plan can only be transferred to an existing or new 403B plan. Please provide the IRS ruling on this becuase he has the option of leaving the 403B plan with VALIC if he chooses. I am not aware of this ruling but I realize there are many unique IRS rulings or provisions regarding qualified money. Your assistance is greatly appreciated. Incidentally, the employer will leave the 457 plan with VALIC because the death benefit is greater than the current account values. Once 457 values equal death benefit values they will transfer to the new 457 plan established with Lincoln Financial.
Richard J Maciasz
2002 False River Drive
New Roads, LA 70760
225-638-6051
Permalink Submitted by Al Fry on Tue, 2008-12-30 03:05
In order to transfer to an IRA, there must be a qualifying event, such as termination of service or over age 59 1/2. It sounds as if they are not terminating the plan, just switching vendors.