403(b) NUA | Ed Slott and Company, LLC

403(b) NUA

Some former Federal Employees now work for a Company that is allowed to invest in 403(b) contracts. Many have done so and may have large amounts of Company stock in their 403(b). It appears that many 90-24 transfers may no longer allowed after 9/24/2007. Query, can an employee that is not yet ready to retire move the non-stock portfolio to another 403(b) via a 90-24 transfer, without destroying the ability to do a NUA on the Company stock when they do retire. They would move the Stock out, then in the same year move the other 403(b) and any remaining non-stock funds to an IRA.

Al, Not totally sure, but NUA appears to be limited to holdings in qualified trusts under Sec 401a, and a 403b is not a qualified trust, so NUA is likely not an option. I could not find any reference to it in Sec 403 which does incorporate certain elements from 401, but no sign that NUA would be one of them. Further, I think I saw that the new 403b Regs call into question transfers to 401k plans. But even if these shares were transferred to a 401k that would accept them, they would probably not acquire employer share status that they would not have had in the 403b.

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