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Merger 403(b) and 401(k) plans


Guest Darcy L. Hitesman
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Guest Darcy L. Hitesman

With the new regulations that permit rollovers between 401(k) and 403(B) plans, there is no longer a need for my church client to maintain both types of plans. They would like to merge the two plans together. Anyone who has seen anything commenting about this possibility, I would appreciate the info.

Thanks.

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  • 2 weeks later...
Guest brstokes

The new rules concerning 403(B) to 401(k) plans are confusing many. Yes, you may roll a 403(B) to a 401(k) but only if you have a triggering event, i.e. termination of employment.

A sponsor terminating a plan IS NOT A TRIGGERING event. Thus the participant can not roll balances into the sponsors new 401(k) plan.

Barry

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Guest Darcy L. Hitesman

Thanks Barry. That is the place I got to in my analysis. The people will not have a triggering event for a rollover. That is why I am looking at merging the two plans. In the past, I would have said that it is not possible. However, now that rollovers are possible between 403(B) and 401(k) plans, is it possible to merge a 403(B) and a 401(k) plan (i.e., have the rules changed enough to support a merger)?

Thanks again.

Darcy

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Guest brstokes

No. You can not merge a 403(B) into a 401(k). The code does not allow it.

You must have a triggering event to roll a 403(B) balance into a 401(k) plan, i.e. termination of employement. A plan sponsor discontinueing a 403(B) contribution is not a triggering event.

Barry

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