403b r/o to IRA- 59.5- still working
Client will be 59.5 in January. Wants to roll lump sum to an IRA. Will still be employed. Pre 9/25 I would 90-24. Since this is no longer an option, is 59.5 still employed considered a “distributable event” in regard to R/O. I am fee based, and my company is not a 403b certified company with TRS in the state of TX- so I can’t do 403b to 403b.
Thanks for feedback.
Permalink Submitted by Alan Spross on Thu, 2007-11-01 00:12
As I understand it, expiration of the 90-24 transfer has no affect on the employee’s ability to do an IRA transfer at 59.5.
Permalink Submitted by Al Fry on Thu, 2007-11-01 02:32
I agree with Alan. I’m not sure of the rules, however if it is an ERISA plan (employer contributions). Also, one would want to make sure no pre-1987 funds were transferred that might be grandfathered until age 75 for RMD purposes. That is lost in an IRA.
Permalink Submitted by Denise Appleby on Thu, 2007-11-01 05:51
Bear in mind also that :
—-90-24 applies to a 403(b) to another 403(b), not 403(b) to IRA
—-The elimination of a transfer under 90-24 does not mean that a transfer can no longer occur, it just means that the transfer should occur only if the new requirements are satisfied[list][/list]
However, while the 90-24 transfer rules, or the transfer rules under the new final regs do not affect a direct rollover to an IRA, other provisions of the final regs may affect the distribution. For instance, the employer may need to approve the distribution. As this requirement is not clearly defined under the regs, different financial institutions have taken different positions on whether they should obtain employer-approval for distributions.