403b/ira | Ed Slott and Company, LLC


Hi. I have a question regarding 403(b)s. I have a client 53 years of age and plans to work for another 10 years. She is a NYS teacher and participates in the school's non-erisa 403(b) plan. She would like to transfer a portion of the 403(b) to our firm and still contribute to her 403(b). Do you foresee any issue regarding the IRS if we transfer(trustee to trustee) a portion of her 403b to our firm and title it as a 403(b)? Could we just rollover (trustee to trustee) and title it as an IRA? I'm not looking for any headaches, but I would like the assets. I have done this in the past, but it has been roughly 15 years ago and I would like to make sure i'm not missing anything. Thank you very much and if you need additional info. please let me know.

She would have to check with the plan to determine what amounts are eligible for an in service distribution. Amounts in the plan from client's elective deferrals are not eligible for distribution until 59.5, if then. If there is an employer match or earnings in the plan, those amounts can be distributed if the plan permits. When client determines how much (if any) can be distributed in a direct rollover, that amount can be rolled to an IRA. I assume your firm is NOT a 403b plan vendor approved by the employer under which a non reportable transfer might be done.


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